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Economics > Econ unit 6 test > Flashcards

Econ unit 6 test Flashcards

1
Q

Unemployed

A

People available for work who are seeking a job or who worked less than one hour for pay

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2
Q

Frictional Unemployment

A

Unemployment caused by workers who are between jobs for one reason or another

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3
Q

Structural Unemployment

A

occurs when demand for workers skills are reduced from a fundamental change in the operations of economy

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4
Q

Seasonal Unemployment

A

occurs from changes in weather or demand for certain products

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5
Q

Cyclical Unemployment

A

joblessness caused by a reduction in the economies total demand for goods and services

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6
Q

Technological Unemployment

A

occurs when automation or low skilled jobs are replaced with machines or other equipment that does their job

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7
Q

how do you measure unemployment?

A

of unemployed individuals / total # of people in the civilian labor force

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8
Q

Natural rate of unemployment

A

min level of unemployment that our economy can achieve in normal times

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9
Q

Full employment

A

when the rate of unemployment is equal to the natural rate

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10
Q

Civilian labor force

A

sum of all individuals who are classified as employed or unemployed

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11
Q

Inflation

A

change in price index between years / price index in previous year
increase in the general price level

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12
Q

Deflation

A

decrease in the general price level

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13
Q

Creeping inflation

A

1-3%

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14
Q

Galloping inflation

A

100-300%

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15
Q

Hyperinflation

A

500+%

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16
Q

Price index

A

(price in a given year / price in base year) times 100

17
Q

Gross domestic product (GDP)

A

the dollar amount of all final goods and services produced within countries national borders in a year

18
Q

Intermediate products

A

products used to make other products already counted in GDP

19
Q

Secondhand sales

A

the sales of used goods

20
Q

Non-market transactions

A

transactions that do not take place in the market

21
Q

Gross national product (GNP)

A

the dollar value of all final goods, and structures produced in one year with labor and property supplied by a countries residents

22
Q

Expenditures approach to calculate GDP

A

Household consumption + Investment by firms + Government spending + (Exports - Imports)
C + I + G + (X - M)

23
Q

Income approach to calculate GDP

A

just add everything together
employee compensations + rental income + net interest + corporate profits + proprietors income + indirect business taxes + capital consumption allowances

24
Q

Aggregate demand

A

the total quantity of goods and services demanded at different price levels

25
Q

Macroeconomic equilibrium

A

the level of real GDP consistent with a given price level

26
Q

Real balance effect

A

increase in the amount of aggregate output demanded that results from the increased real value of the publics financial assets

27
Q

Interest rate effect

A

the increase in the amount of aggregate output demanded that results when a reduction in overall price level causes interest rates to fall

28
Q

International rate of effect

A

the increase in the amount of aggregate output demanded that results when a reduction in price level makes domestic products less expensive relative to foreign products

28
Q

a. Fiscal policy
b. Government influence

A

a. gov attempt to stabilize the economy through taxing and gov spending
b. gov can influence AD through its policies and manipulate the money supply

29
Q

Shifters of aggregate demand:
a. Household consumption
b. Investment by firms
c. Government spending

A

a. what peopole in a household buy, if peole buy more stuff it shifts right
b. increase in interest rates would lower investment and push the AD curve to the left
c. an increase in gov spending would shift the AD curve to the right

29
Q

Aggregate supply

A

the total value of goods and services that all firms would produce in a specific period of time at various price levels.

30
Q

Shifters of AS:
a. Employment costs
b. Cost of other inputs
c. Impact of gov

A

a. wages, employment taxes, unit labor costs are also affected by the level of labor productions
b. commodity prices, raw materials
c. environmental taxes, business regulations that affect the cost of production

31
Q

Real wages

A

purchasing power of their money wages
increase - gave more money/spend less money
decrease - have less money/ spend less money

32
Q

Potential GDP

A

max sustainble level of production in the economy

33
Q

Stagflation

A

high unemployment combined with high inflation

34
Q

Demand-pull inflation

A

inflation caused by increases in aggregate demand

35
Q

Cost-push inflation

A

inflation caused by rising costs of production

36
Q

Business cycle

A

the recurring ups and downs in the level of economic activity

Economics (8 decks)

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