2.8 - rates of unemployment Flashcards
1
Q
Natural rate of unemployment
A
Rate of unemployment when market is in equilibrium
2
Q
Non-accelerating inflation rate of unemployment
A
Level of unemployment that is consistent with no changes in the inflation rate
3
Q
Stagflation
A
Inflation rates + unemployment rises simultaneously
4
Q
What is stagflation caused by?
A
Negative supply side shocks:
- deflation of currency
- tariffs on raw materials
5
Q
Phillips Curve
A
Inverse relationship between inflation + unemployment
