unemployment that occurs when people take time to find a job
frictional employment
unemployment that occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season
seasonal employment
unemployment that occurs when workers’ skills do not match the jobs that are available
structural employment
unemployment that rises during economic downturns and falls when the economy improves
cyclical unemployment
Four Types of Unemployment
frictional, seasonal, structural, cyclical
Five major causes of structural unemployment
the development of new technology the discovery of new resources changes in consumer demand globalization lack of education
composed of civilian’s 16 or older who have a job or are actively looking for a job
the labor force
the level of employment reached when there is no cyclical unemployment
full employment
working at a job for which one is over-qualified, or working part time when full time work is desired
underemployed
works who want a job but have given up looking
discouraged workers
a general increase in prices
inflation
the ability to purchase goods and services
purchasing power
a measurement that shows how the average price of a standard group of goods changes over time
price index
a price index determined by measuring the price of a standard group of goods meant to represent the “market basket” of a typical urban consumer
Consumer Price Index
the percentage rate of change in price level over time
inflation rate
the rate of inflation excluding the effects of food and energy prices
core inflation rate
inflation that is our of control
hyperinflation
theory that too much money in the economy causes inflation
quantity theory
theory that inflation occurs when demand for goods and services exceeds existing supplies
demand-pull theory
theory that inflation occurs when producers raise prices in order to meet increased costs
cost-push theory
the process by which rising wages cause higher prices, and higher prices cause higher wages
wage-price spiral
Three Effects of Inflation
purchasing power
income
interest rates
income that does not increase even when prices go up
fixed income
a sustained drop in the price level
deflation
the income level below which income is insufficient to support a family or household
poverty threshold
the percentage of people who live in households with income below the official poverty line
poverty rate
Four factors affecting the poverty rate
race and ethnic origin
type of family
age
residence
Causes of Poverty (5)
lack of education location racial and gender discrimination economic shifts shifts in family structure
how the nation’s total income is distributed among its population
income distribution
government issued coupons that recipients exchange for food
food stamps
the curve that illustrates income distribution
Lorenz curve
area where companies can locate free of certain local, state, and federal taxes and restrictions
enterprise zone
federal funds given to the states in lump sums
block grant
a program requiring work in exchange for temporary assisstance
workfare
