Economics Flashcards
(23 cards)
Define labour force
Employed people and those actively looking for work
How is unemployment measured and what is the calculation for the unemployment rate
Measured with unemployment rate
Unemployment rate - number of unemployed people / divided by / labour force / times / 100
What is the target rate for economic growth
3-3.5 percent
Define and give examples of factors of production
Recourses people use to produce goods and services
Land, labour, capital, enterprise
What is the target rate for inflation
2-3 percent
Identify people not included in the labour force
People not working or not seeking a job
Define Opportunity cost and provide examples
What you give up when you purchase something else
E.g. buying movie tickets, money could have been spent on food and time spent on reading books
What are the impacts of unemployment
Leads to more government spending, lower economic growth, poverty and crime
calculation of economic growth
GDP,year 2 - GDP,year 1 divided by GDP year 1 times 100
Define economics
The study of how society uses its limited resources
Define economic problem
Is a problem due to the scarcity of items/recources
What are the types of unemployment
Frictional (job transitions)
Structural (skills mismatch
Cyclical (business cut jobs due to law demand
Seasonal (tourism, agricultural, retail)
Define economic growth
Increased in the size of a country’s economy over a period of time
What is the target rate for inflation
2/3 %
What is demand inflation and what can cause it
Demand inflation is when demand passes supply, it is caused by higher consumer spending, low interest rates
What causes cost inflation
Caused by increase in wages but not productivity expensive materials shortages and supply chain issues
Define unemployment
Number of people looking for work but unable to find a job
What is cost inflation
Cost inflation occurs when production costs rise
Define consumer price index
CPI tracks price changes in essential goods and services
What are the impacts of inflation
Reduces affordability and raises the cost of living
Calculation for unemployment
Number of unemployed people divided by the labour force times 100
What does GDP measure
GDP measures the total market value of all goods produced in a a country annually
Calculation for inflation
CPI current year - CPI previous year divided by previous year times 100
