Chapter 15

Question 0

Structural unemployment

Answer 0

Job seekers do not have the skills demanded

Question 1

Frictional unemployment

Answer 1

Looking for a job and learning about employment opportunities

Question 2

Seasonal unemployment

Answer 2

Caused by seasonal changes in labor demand

Question 3

Cyclical unemployment

Answer 3

Caused by recession phase in business cycle

Question 4

Full employment

Answer 4

Occurs when there is no cyclical unemployment

Relatively low

Question 5

Underemployment

Answer 5

Workers are overqualified for their jobs or work fewer hours than they would prefer

Question 6

Labor force

Answer 6

Those in the adult pop. who are either working or looking for work

Question 7

Unemployment rate

Answer 7

Number of people without jobs who are looking for work divided by the number in the labor force

Question 8

Labor force participation rate

Answer 8

Number in the labor force divided by the adult pop.

Question 9

Unemployment benefits

Answer 9

Cash transfers to unemployed workers who lost their jobs, actively seek work, and meet other qualifications

Question 10

Inflation

Answer 10

Increase in the economy’s price level

Question 11

Demand-pull inflation

Answer 11

Inflation resulting from a rightward shift of the aggregate demand curve; greater demand pulls up the price level

Question 12

Cost-push inflation

Answer 12

Inflation resulting from a leftward shift of the aggregate supply curve; reduced supply pushes up the price level

Question 13

Nominal interest rate

Answer 13

Interest rate expressed in current dollars as a percentage of the amount loaned; interest rate on the loan agreement

Question 14

Real interest rate

Answer 14

Interest rate expressed in dollars of constant purchasing power as a percentage of the amount loaned;
Nominal interest rate minus the inflation rate

Question 15

Laissez-faire

Answer 15

Doctrine that the govt. should not intervene in a market economy beyond the minimum required to maintain peace and property rights

Question 16

Demand-side economics

Answer 16

Macroeconomic policy that focuses on shifting the aggregate demand curve as a way of promoting full employment and price stability

Question 17

Stagflation

Answer 17

decline of a nations output accompanied by a rise or inflation in the price level

Question 18

Supply-side economics

Answer 18

Macroeconomic policy that focuses on a rightward shift of the aggregate supply curve through tax cuts or other changes that increase production incentives

Question 19

Cycle of poverty

Answer 19

Children in welfare families may end up on welfare themselves es when they grow up

Question 20

Welfare reform

Answer 20

An overhaul of the welfare system in 1996 that imposed a lifetime welfare limit of five years per recipient and other conditions