Unemployment and low inflation

Question 1

What does Unemployed mean?

Answer 1

Workers who are of working age that are actively seeking work but unable to find a job

Question 2

What is Underemployment?

Answer 2

Workers being employed in jobs that do not fully utilize their skills/qualifications, or workers who are willing to work full-time being only able to find part-time work

Question 3

What is the Labour force?

Answer 3

Employed + Unemployed, Population

Question 4

What is Inflation?

Answer 4

Sustained increase in general price levels

Question 5

What is Deflation?

Answer 5

Sustained decrease in general price levels

Question 6

What is Disinflation?

Answer 6

Fall in the rate of inflation (general price levels can still be rising)

Question 7

What is the Consumer Price Index (CPI)?

Answer 7

Measure of the cost of living of the average household by tracking the prices of a fixed basket of goods and services commonly bought by households. The change in CPI from one period to another can be used to calculate the change in the inflation rate; positive rate of change is inflation; negative rate of change is deflation

Question 8

What is the Core rate of inflation?

Answer 8

CPI excluding volatile items such as food and energy, as they could distort the rate of inflation with sudden, short term changes price

Question 9

What is the Producer Price Index (PPI)?

Answer 9

Several indices of prices received by producers at various stages of the production process; can serve as predictor of changes in the CPI as they track the prices of factor inputs