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31 Cards in this Set

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What is Unemployment?
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.
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.
What is Frictional Unemployment?
Unemployment that occurs when people take time to find a job.
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
What is Seasonal Unemployment?
Unemployment that occurs as Unemployment due to harvest schedules or vacations, or when industries slow or shut down for a season.
teachers may take time off in summer or migrant workers when crops have not come in as in winter months.
What is Structural Unemployment?
Unemployment that occurs when workers' skills do not match the jobs that are available (under/over skilled)
Caused by: new technology, new resources, changes in consumer demand, globalization, & lack of education.
What is Cyclical Unemployment?
Unemployment that rises during economic downturns and falls when the economy improves.
Affects workers in industries sensitive to changes in the business cycle (ex. steel industry)
What is a Census?
An official count of the population.
Conducted monthly by the U.S. Bureau of the __?___to determine the size & other characteristics of population
What is the Unemployment Rate?
The percentate of the nation's labor force that is unemployed.
Current Population Poll conducted by the BLS identifies monthly the #'s of employed & ____?_____
What is Full Employment?
The level of unemployment reached when there is no Cyclical Unemployment.
Unemployment of 4-6% is normal in efficient economies therefore 96-94% are employed.
What is Underemployed?
Working at a job for which one is overqualified, or working part-time when full-time work is desired.
ex. college graduate with a major that has few/no job sources (Philosophy/Latin )
What is Inflation?
A general increase in prices.
Causes reduction in purchasing power, erodes income & interest rates of investments
What is Purchasing Power?
The ability to purchase goods and services.
As prices rise, P.P. declines
What is a Price Index?
A measurement that shows how the average price of a standard group of goods changes over time.
Produces an average that economists can compare to earlier averages to see how much prices have changed over time.
What is the Consumer Price Index (C.P.I.)?
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.
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.
What is the Market Basket?
A representative collection of goods and services.
Used to determine rate of inflation of a sample group of products.
What is the Inflation Rate?
The percentage rate of change in price level over time.
CPI = updated cost / base period cost x 100 (used to calculate the inflation rate)
What is the Core Inflation Rate?
The rate of inflation excluding the effects of food and energy prices.
Exludes graph spikes caused by temporary world food & fuel prices.
What is Hyperinflation?
Inflation that is out of control & may lead to economic collapse
symptoms are inflation rates spiking at 100-500% per month & devaluation of money
What is Quantity Theory?
Theory that too much money in the economy causes inflation.
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.
What is Demand-Pull Theory?
Theory that inflation occurs when demand for goods and services exceeds existing supplies.
In war times the government places heavy demand on new equipment & services makes those items more valuable forcing up prices & worker wages.
What is Cost-Push Theory?
Theory that inflation occurs when producers raise prices in order to meet increased costs.
Higher prices of raw materials and wage increases cause prices to increase also. Ex. Collective Bargaining
What is Wage-Price Spiral?
The process by which rising wages cause higher prices and higher prices cause higher wages.
caused by Cost-Push inflation ( i.e., wage increase=product price increases=rising prices of farmers=higher raw food prices= worker wage increase
What is Fixed Income?
Income that does not increase even when prices go up.
ex. retirees income from social security is adjusted by Gov. for inflation but pension funds do not adjust to inflation rate.
What is Deflation?
A sustained drop in the price level.
caused by rising unemployment and falling capital investment
What is the Poverty Threshold?
The income level below which income is insufficient to support a family or household.
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
What is the Poverty Rate?
The percentage of people who live in households with income below the official poverty line.
P.R. differ by Race/Ethnic origin, Type of Family, Age & Residence
What is Income Distribution?
How the nation's total income is distributed among its population.
Determined by Income Inequality & Income Gaps
What are Food Stamps?
Government-issued coupons that recipients exhange for food.
richest fifth recieves more than 13 times the income of the typical household in the poorest fifth. Offset by housing subsidies, healthcare & ___?_ ___?__.
What is Lorenz Curve?
The curve that illustrates income distribution.
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
What is the Enterprise Zone?
Area where companies can locate free of certain local, state, and federal taxes and restrictions.
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
What is a Block Grant?
Federal funds given to the states in lump sums.
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.
What is Workfare?
A program requiring work in exchange for temporary assistance.
Shift from Welfare to Workfare to reduce poverty by providing poor Americans with labor skills and access to steady, adequate income.