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23 Cards in this Set
- Front
- Back
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diminishing returns to labor
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if the amount of capital and other inputs remains constant, then the greater the quantity of labor employed the less each additional worker contributes
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worker mobility
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the movement of workers between jobs, firms, and industries
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skill-based technological change
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technological change that affects marginal products of higher-skilled workers differently from those of lower-skilled workers.
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frictional unemployment
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the short-term unemployment associated with the process of matching workers with jobs
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structural unemployment
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the long-term and chronic unemployment that exists even when the economy is producing at a normal rate
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cyclical unemployment
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the extra unemployment that occurs during periods of recession
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impediments to full employment
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labor unions, minimum wage laws, unemployment insurance, certain government regulation
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saving
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current income minus spending on current needs
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saving rate
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saving divided by income
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wealth
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the value of assets minus liabilities
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assets
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anything of value that one owns
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liabilities
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the debt one owes
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balance sheet
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a list of an economic unit's assets and liabilities on a specific date
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flow
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a measure that is defined per unit of time
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stock
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a measure that is defined at a point in time
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capital gains
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increases in the value of existing assets
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capital losses
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decreases in the values of existing assets
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life-cycle saving
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saving to meet long-term objectives such as retirement, college saving, or purchase of a home
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precautionary saving
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saving for protection against unexpected setbacks, such as the loss of job or a medical emergency
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bequest saving
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saving done for the purpose of leaving an inheritance
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national saving
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the saving of an entire economy, equal to the GDP minus consumption expenditures and government purchases of goods and services
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national saving equation =
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y - c - g
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transfer payments
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payments the government makes to the public for which it receives no current goods or services in return
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