Macroeconomics objectives

Question 1

underemployment

Answer 1

being out of work, seeking for work but is unable to get work

Question 2

unemployment

Answer 2

individuals who want full time job but merely working as part-time// someone who is over-qualified for work

Question 3

unemployment rate

Answer 3

percentage of the total labor force that is unemployed

Question 4

total labor force

Answer 4

population of individuals who are of legal age and is either employed or unemployed

Question 5

frictional unemployment

Answer 5

70 Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another.

Question 6

structural unemployment

Answer 6

Structural unemployment is a form of unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers

Question 7

cyclical unemployment

Answer 7

Cyclical unemployment is a factor of overall unemployment that relates to the cyclical trends in growth and production that occur within the business cycle.

Question 8

the natural rate of unemployment (NRU)

Answer 8

As a result, the sum of structural and frictional unemployment is referred to as the natural rate of unemployment also called “full employment” unemployment rate. This is the average level of unemployment that is expected to prevail in an economy and in the absence of cyclical unemployment.

Question 9

demand deficient unemployment

Answer 9

This occurs when there is insufficient demand in the economy to maintain full employment. If demand falls, firms sell less and so reduce production.

Question 10

inflation

Answer 10

Inflation is defined as a sustained increase in the general level of prices for goods and services.

Question 11

consumer price index

Answer 11

A consumer price index (CPI) measures changes in the price level of a market basket of consumer goods and services purchased by households.

Question 12

inflation rate

Answer 12

Annual rates of inflation are calculated using 12-month selections of the BLS’s Consumer Price Index.

Question 13

demand pull inflation

Answer 13

Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involvesinflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve.

Question 14

cost push inflation

Answer 14

Cost push inflation is inflation caused by an increase in prices of inputs like labour, raw material, etc. The increased price of the factors of production leads to a decreased supply of these goods.

Question 15

deflation

Answer 15

deflation is a decrease in the general price level of goods and services.Deflation occurs when the inflation rate falls below 0% (a negative inflation rate).

Question 16

real income

Answer 16

income of individuals or nations after adjusting for inflation.

Question 17

real interest rate

Answer 17

rate of interest an investor expects to receive after allowing for inflation

Question 18

deflationary spiral

Answer 18

A deflationary spiral is when a period of decreasing prices (deflation) leads to a situation whereby the economy cannot recover, which compounds over time leading to even lower prices in a vicious cycle.

Question 19

the phillips curve

Answer 19

Shows unemployment

Question 20

economic growth rate

Answer 20

a measure of economic growth from one period to another in percentage terms.

Question 21

physical capital

Answer 21

physical capital is one of the three primary factors of production, also known as inputs production function

Question 22

human capital

Answer 22

the collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community

Question 23

equity

Answer 23

Quality of being fair and impartial

Question 24

equality

Answer 24

the state of being equal, especially in status, rights, and opportunities.

Question 25

income distribution

Answer 25

refers to the way in which income is distributed

among the population.

Question 26

lorenz curve

Answer 26

Diagram that represents inequality distribution of wealth: The Lorenz curve:

Question 27

the gini coeficient

Answer 27

way of showing income inequality by converting the

Lorenz curve into a single statistic.

Question 28

relative poverty

Answer 28

where a proportion of the population in a country

cannot enjoy the standard of living normal to their society.

Question 29

absolute poverty

Answer 29

when only the minimum level of basic needs- such

as food, shelter and clothing-can be met.

Question 30

regressive taxation

Answer 30

where the marginal rate of tax is lower than the

average tax rate as income increases.

Question 31

proportional taxation

Answer 31

where the average and marginal tax rates are

the same, regardless of income levels.

Question 32

progressive taxation

Answer 32

where the marginal rate of tax applied is greater

than the average tax rate as incomes increase.

Question 33

transfer payments

Answer 33

refer to payments made by the government to redistribute income.