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18 Cards in this Set
- Front
- Back
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Frictional Unemployment
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Brief periods of unemployment caused by people voluntarily quitting work to find a better job
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Structural Unemployment
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Unemployment that results from technological changes
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Cyclical Unemployment
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Unemployment associated with the downturn and recession phases of the business cycle
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Discouraged workers
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Unemployed people who give up looking for jobs after experiencing rejection
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Underemployed workers
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Employed workers in jobs that do not utilize their productive talents
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Labor Force
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People who are gainfully employed or actively seeking employment
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Natural rate of unemployment
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rate of unemployment caused by frictional plus structural unemployment
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Full Employment
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Employment level at which the actual rate = natural rate of unemployment
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Recessionary Gap
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Amount by which aggregate expenditure falls short of the level needed to generate equilibrium national income at full employment with out inflation
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Inflationary Gap
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amount by which aggregate expenditure exceeds the level needed to generate equilibrium national income at full employment without inflation
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Fiscal Policy
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Government spending and taxation policy to achieve macroeconomic goals of full employment without inflation
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Balanced Budget
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Government Spending = Tax Revenues
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Tax Multiplier
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-mpc/(1-mpc)
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Budget Deficit
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Governemnt Spending greater than Tax revenues
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Budget Surplus
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Tax revenues greater than government spending
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Countercyclical Fiscal Policy
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Fiscal Policy made to moderate the severity of the business cycle
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Accelerator
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relationship between the level of investment and the change in the level of national income
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Balanced Budget Multiplier
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The effect on the equilibrium level of national income of an equal change in government spending and taxes
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