question
frictional
answer
-the good/okay; based on the individual and individual business
-ONE person unemployed -> ONE job opening available
-in the short term; this type is desirable
-ONE person unemployed -> ONE job opening available
-in the short term; this type is desirable
question
structural
answer
-bad type; industry wide
-ONE person unemployed -> ONE job opening available
-in the long-term; this type is undesirable and inefficient
-inevitable in dynamic market
-policies
-ONE person unemployed -> ONE job opening available
-in the long-term; this type is undesirable and inefficient
-inevitable in dynamic market
-policies
question
cyclical
answer
-worst type; related to a recession
-ONE person unemployed -> NO job opening available
-labor surplus -> lack of jobs
-short or long term; very undesirable
-recession decides if it's short or long term, only way to fix is by creating jobs and growing economy
-ONE person unemployed -> NO job opening available
-labor surplus -> lack of jobs
-short or long term; very undesirable
-recession decides if it's short or long term, only way to fix is by creating jobs and growing economy
question
seasonal
answer
-a cultural season creates jobs
-short term; inevitable
-create nonseasonal jobs in order to fix this (diversification of economy)
-short term; inevitable
-create nonseasonal jobs in order to fix this (diversification of economy)
question
full employment
answer
structural and frictional employment, NO cyclical employment OR when there's cyclical unemployment and a surplus in the labor market and no structural or frictional unemployment
question
inflation
answer
continuous increase in the aggregate price level of goods and services
question
inflation rate
answer
rate % change in aggregate price level overtime; percent change in the aggregate price level; measure of how overall prices of foods and services change from one point in time to another
question
measurement
answer
fixed basket of goods and services; we have to hold everything constant (must be comparing same items bought each time)
question
consumer price index
answer
overall measure of prices that affects consumer-hold everything constant
question
producer price index
answer
usually measures purchases by producers and sellers
question
total inflation rates
answer
looking at all of the goods and tracking the percent change in everything
question
core inflation rate
answer
excludes food and energy and then looks at percent change of price of everything else
question
real value
answer
nominal - rate of inflation
question
fisher effect
answer
as inflation rates get higher, everything else held constant; nominal rates go up
question
gross domestic product
answer
market value of all final goods/services produced within a country in a period of time
question
stock variables
answer
independent of time
ex. money
ex. money
question
flow variables
answer
function of time
ex. minimum wage, income per year, GDP
ex. minimum wage, income per year, GDP
question
income approach
answer
if i produce a product and sell it i'm getting income from that production
question
expenditure approach
answer
-adding up all the spending
-C + I + G + X - IM = y (Real GDP)
-C + I + G + X - IM = y (Real GDP)
question
consumption
answer
individual purchases
question
investment
answer
-business purchasing new factories or new equipment
-new residential housing counted as "investment" not individual purchases
-net inventory change counted as investment
-new residential housing counted as "investment" not individual purchases
-net inventory change counted as investment
question
government spending
answer
-new roads
-interstates being fixed
-government employees
-interstates being fixed
-government employees
question
exports
answer
-foreigners spending money on domestic goods
question
imports
answer
-money spent on foreign goods
question
rate of economic growth
answer
% change in real GDP (output)
question
expansion
answer
positive economic growth
question
economic recession
answer
slowdown in economic activity
question
technical recession
answer
two or more consecutive quarters of negative economic growth
question
functions of money
answer
-medium of exchange
-means of unilateral payment
-unit of account
-standard of value
-store of value
-standard of deferred payment
-means of unilateral payment
-unit of account
-standard of value
-store of value
-standard of deferred payment
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