Economics: C13 Economic Challenges

Front 1

What is Unemployment?

Back 1

People who do not meet the 3 criteria for employment if temporarily out of work or not working but have actively
searched for a new job within the last 4 weeks.

Hint 1

people 16 yrs.> who 1. worked at least 1 hr. for pay w/n the past week, 2. worked 15 hrs. > w/o pay in a family business, and held jobs but didn't work due to illness, vacation, labor dispute, or bad weather.

Front 2

What is Frictional Unemployment?

Back 2

Unemployment that occurs when people take time to find a job.

Hint 2

Ex. one who leaves a job to find a better one, one who graduates from college & is interviewing for a position, or taking time off to care for an aging or dying relative but will return to the work force

Front 3

What is Seasonal Unemployment?

Back 3

Unemployment that occurs as Unemployment due to harvest schedules or vacations, or when industries slow or shut down for a season.

Hint 3

teachers may take time off in summer or migrant workers when crops have not come in as in winter months.

Front 4

What is Structural Unemployment?

Back 4

Unemployment that occurs when workers' skills do not match the jobs that are available (under/over skilled)

Hint 4

Caused by: new technology, new resources, changes in consumer demand, globalization, & lack of education.

Front 5

What is Cyclical Unemployment?

Back 5

Unemployment that rises during economic downturns and falls when the economy improves.

Hint 5

Affects workers in industries sensitive to changes in the business cycle (ex. steel industry)

Front 6

What is a Census?

Back 6

An official count of the population.

Hint 6

Conducted monthly by the U.S. Bureau of the __?___to determine the size & other characteristics of population

Front 7

What is the Unemployment Rate?

Back 7

The percentate of the nation's labor force that is unemployed.

Hint 7

Current Population Poll conducted by the BLS identifies monthly the #'s of employed & ____?_____

Front 8

What is Full Employment?

Back 8

The level of unemployment reached when there is no Cyclical Unemployment.

Hint 8

Unemployment of 4-6% is normal in efficient economies therefore 96-94% are employed.

Front 9

What is Underemployed?

Back 9

Working at a job for which one is overqualified, or working part-time when full-time work is desired.

Hint 9

ex. college graduate with a major that has few/no job sources (Philosophy/Latin )

Front 10

What is Inflation?

Back 10

A general increase in prices.

Hint 10

Causes reduction in purchasing power, erodes income & interest rates of investments

Front 11

What is Purchasing Power?

Back 11

The ability to purchase goods and services.

Hint 11

As prices rise, P.P. declines

Front 12

What is a Price Index?

Back 12

A measurement that shows how the average price of a standard group of goods changes over time.

Hint 12

Produces an average that economists can compare to earlier averages to see how much prices have changed over time.

Front 13

What is the Consumer Price Index (C.P.I.)?

Back 13

A price index determined by measuring the price of a standard group of goods meant to represent the "market basket" of a typical urban consumer.

Hint 13

Used by consumers, businesses and government to compare cost of a group of goods this month with what the same /similar group cost months / years ago.

Front 14

What is the Market Basket?

Back 14

A representative collection of goods and services.

Hint 14

Used to determine rate of inflation of a sample group of products.

Front 15

What is the Inflation Rate?

Back 15

The percentage rate of change in price level over time.

Hint 15

CPI = updated cost / base period cost x 100 (used to calculate the inflation rate)

Front 16

What is the Core Inflation Rate?

Back 16

The rate of inflation excluding the effects of food and energy prices.

Hint 16

Exludes graph spikes caused by temporary world food & fuel prices.

Front 17

What is Hyperinflation?

Back 17

Inflation that is out of control & may lead to economic collapse

Hint 17

symptoms are inflation rates spiking at 100-500% per month & devaluation of money

Front 18

What is Quantity Theory?

Back 18

Theory that too much money in the economy causes inflation.

Hint 18

Economists from Univ. of Chicago suggested the money supply could be used to control price levels in the long term. Money supply should increase at same rate as economic growth.

Front 19

What is Demand-Pull Theory?

Back 19

Theory that inflation occurs when demand for goods and services exceeds existing supplies.

Hint 19

In war times the government places heavy demand on new equipment & services makes those items more valuable forcing up prices & worker wages.

Front 20

What is Cost-Push Theory?

Back 20

Theory that inflation occurs when producers raise prices in order to meet increased costs.

Hint 20

Higher prices of raw materials and wage increases cause prices to increase also. Ex. Collective Bargaining

Front 21

What is Wage-Price Spiral?

Back 21

The process by which rising wages cause higher prices and higher prices cause higher wages.

Hint 21

caused by Cost-Push inflation ( i.e., wage increase=product price increases=rising prices of farmers=higher raw food prices= worker wage increase

Front 22

What is Fixed Income?

Back 22

Income that does not increase even when prices go up.

Hint 22

ex. retirees income from social security is adjusted by Gov. for inflation but pension funds do not adjust to inflation rate.

Front 23

What is Deflation?

Back 23

A sustained drop in the price level.

Hint 23

caused by rising unemployment and falling capital investment

Front 24

What is the Poverty Threshold?

Back 24

The income level below which income is insufficient to support a family or household.

Hint 24

varies with size of family
Ex. in 2002 the P.T. for a single parent under age 65 with one child was $12,400 or $18,244 for family of 4 w/ 2 children

Front 25

What is the Poverty Rate?

Back 25

The percentage of people who live in households with income below the official poverty line.

Hint 25

P.R. differ by Race/Ethnic origin, Type of Family, Age & Residence

Front 26

What is Income Distribution?

Back 26

How the nation's total income is distributed among its population.

Hint 26

Determined by Income Inequality & Income Gaps

Front 27

What are Food Stamps?

Back 27

Government-issued coupons that recipients exhange for food.

Hint 27

richest fifth recieves more than 13 times the income of the typical household in the poorest fifth. Offset by housing subsidies, healthcare & ___?_ ___?__.

Front 28

What is Lorenz Curve?

Back 28

The curve that illustrates income distribution.

Hint 28

The area in graph between the line of equality and the ______ _____ represents the amount of inequality in income distribution. Larger area between curves = greater income inequality

Front 29

What is the Enterprise Zone?

Back 29

Area where companies can locate free of certain local, state, and federal taxes and restrictions.

Hint 29

In 1980's these areas were used by companies to avoid taxation but benefit businesses & residents because people can find work near their homes in rundown areas of inner city = revitalization

Front 30

What is a Block Grant?

Back 30

Federal funds given to the states in lump sums.

Hint 30

the Welfare-Reform Act made states responsible for designing & implementing programs to move most poor adults from welfare dependence to employment independence. TANF set a 5 yr. limit on receipt of benefits.

Front 31

What is Workfare?

Back 31

A program requiring work in exchange for temporary assistance.

Hint 31

Shift from Welfare to Workfare to reduce poverty by providing poor Americans with labor skills and access to steady, adequate income.