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23 Cards in this Set
- Front
- Back
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If the consumer price index is 75, then prices have |
Decline 25% since the base year |
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Suppose that nominal GDP was $500 billion in 1970 and $1,500 billion in 1985 and that the relevant price index was 100 in 1970 and 200 in 1985. This indicates that between 1970 and 1985 real GDP did what? |
Increased by $250 billion |
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Unanticipated inflation (where inflation is not adjusted for) |
Benefits debtors at the expense of creditors |
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The civilian labor force includes all persons over the age of what? |
16 who are employed or actively seeking employment and who are not in the Armed Forces |
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Structural unemployment is caused by |
A lack of marketable skills |
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Cyclical unemployment exist because |
There are parotic reductions in the economy's total demand for goods and services |
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Natural rate of unemployment usually means |
Some frictional and structural unemployment but no cyclical unemployment |
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What is the consumer price index CPI |
A measure of the overall cost of goods and services bought by a typical consumer |
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What is structural unemployment? |
Unemployment that results because the number of jobs available in some labor market is insufficient to provide a job for everyone who wants one |
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What is frictional unemployment? |
Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills |
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What is the inflation rate? |
The percentage change in the price index from the preceding period. |
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What is the GDP deflator? |
The ratio of nominal GDP to real GDP, it reflects the current level of prices relative to the level of prices in the base year |
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What is indexation? |
The automatic correction by law or contract of a dollar amount for the effects of inflation |
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What is the nominal interest rate? |
The interest rate as usually reported without a correction for the effects of inflation |
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What is the real interest rate? |
The interest rate corrected for the effects of inflation |
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What are the three unemployment categories? Referring to types of workers |
Employed, unemployed, not in the labor force |
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What is the natural rate of unemployment? |
The normal rate of unemployment around which the employment rate fluctuates |
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What is structural unemployment? |
Unemployment that results because the number of jobs available in some labor market is insufficient to provide a job for everyone who wants one. It can also result from structural changes in the economy. Most commonly technology changes |
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What are discouraged workers? |
Individuals who would like to work but have given up on looking for a job |
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How do you minimum wage laws affect employment? |
One minimum wage is above the equilibrium price, it creates unemployment |
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What is efficiency wages? |
Above equilibrium wages paid by firms to increase worker productivity |
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What is inflation? |
A situation in which the economies overall price level is changing/the percentage change in price level from previous period |
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What is interest representing? |
A payment in the future for a transfer of money in the past |
