Chapter 13 Economics Flashcards
(36 cards)
What is Frictional Unemployment?
Occurs when people take time to find a job.
What are Four basic kinds of unemployment?
frictional, seasonal, structural, and cyclical.
What is Seasonal Unemployment?
Occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules.
What is Structural Unemployment?
Occurs when workers’ skills do not match the jobs that are available.
What are the five major causes of structural unemployment?
The development of new technology, The discovery of new resources, Changes in consumer demand, Globalization, Lack of education.
What is Cyclical Unemployment?
Unemployment that rises during economic downturns and falls when the economy improves.
What is Unemployment Rate?
The percentage of the nation’s labor force that is unemployed.
What is Full Employment?
The level of employment reached when no cyclical unemployment exists.
What is Underemployment?
Working at a job for which they are over-qualified, or working part-time when they desire full-time work.
What is a Discouraged Worker?
A person who wants a job but has given up looking.
What is Inflation?
A general increase in prices.
What is Purchasing Power?
The ability to purchase goods and services.
What is Price Index?
A measurement that shows how the average price of a standard group of goods changes over time.
What is Consumer Price Index (CPI)?
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
What is Market Basket?
A representative collection of goods and services.
What is Inflation Rate?
The percentage rate of change in price level over time.
What is Core Inflation Rate?
The rate of inflation excluding the effects of food and energy prices.
What is Hyperinflation?
Inflation that is out of control.
What is Quantity Theory?
Too much money in the economy causes inflation.
What is Demand-Pull Theory?
Inflation occurs when demand for goods and services exceeds existing supplies.
What is Cost-Push Theory?
Inflation occurs when producers raise prices in order to meet increased costs.
What is Wage-Price Sprial?
The process by which rising wages cause higher prices, and higher prices cause higher wages.
What are the 3 effects on inflation?
The value of money changes, Income may not match inflation, Interest rates may not keep up with the inflation rate.
What is Fixed Income?
Income that does not increase even when prices go up.
