Week 5- Business Cycle, Unemployment, and Inflation Flashcards Preview

Eco 201 > Week 5- Business Cycle, Unemployment, and Inflation > Flashcards

Flashcards in Week 5- Business Cycle, Unemployment, and Inflation Deck (17):
1

Capital goods and consumer durables affected the most by___

business cycle

2

2 problems arise from business cycle:

unemployment and inflation.

3

Unemployment rate=

unemployed/ (employed + unemployed) x 100.

4

Discouraged workers are those eligible for employment and able to work, but ___

currently unemployed and has not attempted to find employment in the last 4 weeks.

5

Frictional Unemployment are___

workers who either searching for jobs or waiting.

6

Structural Unemployment result of a ___

skill mismatch. Worker have to change job to work on something else.

7

Cyclical Unemployment caused by____

decline in total spending. Firms hired less and less workers during recession/depression.

8

The economy is “fully employed” when___

only frictional and structural unemployment occurs.

9

Natural rate of unemployment occurs when___

number of job seekers= number of job vacancies.

10

Demand-Pull Inflation happened when___

Excess demand to limited output.
Caused by an over issuance of money by central bank.

11

Cost-Push Inflation___

Rise in prices due to rising production cost.

12

Nominal income are dollars received as____

wages, rent, interest, and profits.

13

Real income measures___

nominal and adjust it for inflation.

real income= normal income/ price index.

14

Fixed income receiver are people___

whose income are fixed see their income falls when inflation occurs.

15

Who hurts by inflation???

Fixed income receiver- people whose income are fixed see their income falls when inflation happen.

Savers- prices rises, saving decreases.

Creditors- lenders.

Debtors- borrowers.

16

Cost-push inflation reduces___

real output.

17

Hyperinflation

Huge quick increase in price.