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26 Cards in this Set
- Front
- Back
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Frictional unemployment
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temporary mismatch of people and jobs. people leaving jobs, employers needing to fill jobs and new people entering the labor market. economies always have this
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Sessional unemployment
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resulted from a change in season and there for a change in demand
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Structural unemployment
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results from a permanent displacement of workers due to a shift in demand or new technology
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cyclical unemployment
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due to decreased demand of labor in a down turn of a business cycle
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hidden unemployment
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no included in official unemployment rates. these are people who would like to have a job, but have given up looking due to discouragement from past attempts
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inflation
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upward movement in the general price level
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Consumer Price Index (CPI)
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(current cost product/cost of good at base year) X 100
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Current inflation/ deflation rate
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(Current CPI – last years CPI)/ last year’s CPI
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nominal GDP
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the amount of production of goods and services at current prices
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real GDP
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the amount of production of goods walked at a constant level
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Growth rate of GDP
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(current GDP – previous GDP)/ previous GDP X 100
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Monetary policy
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tools that can change the amount of money and credit in the economy. administrated by the Federal Reserve System
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fiscal policy
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manipulation of government expenditures. issued by executive and legislative branch
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Genuine progress Indicator
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tries to correct imperfection in GDP. makes judgements about good and bad economic acvitiy
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Real interest rate
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nominal interest rate – inflation rate
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Keynesian multiplier
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1/1-MPC = change in GDP/ change in investment
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GDP = C +I+ G + (X-M)
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C= consumer spending
I = investment G = government spending (X-M) = Exports and imports |
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Disposable personal income
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consumption function + saving
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Marginal propensity to consume
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change in consumption / change in DPI
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GDP
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DPI=Y-Tx
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(MV=PQ)
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Money stock + income velocity = price level + real GDP
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MPS
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1/multiplier
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money multiplier
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1/ reserve ration
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Discount Rate
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rate of interest feds charge banks to borrow reserves
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Federal funds rate
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rate that banks charge fed reserve to borrow reserves
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liquidity trap
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when interest rates are so low people hold onto there money and will not invest it
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