Chap 16 Flashcards
stagflation?
simultaneous occurrence of substantial unemployment and inflation
phillip’s curve?
historical inverse relationship between the rate of unemployment and the rate of inflation; commonly expresses a tradeoff between the two
inflationary flashpoint?
rate of output at which inflationary pressures intensify; the point on the AS curve where slope increases sharply
marginal tax rate?
tax rate imposed on the last (marginal) dollar of income
investment?
money spent on production of new plants, equipment, and structures (capital) in a particular time period
tax rebate?
lump sum refund of taxes paid
tax elasticity of supply
percentage change in quantity supplied divided by percentage change in tax rates
saving?
part of disposable income not spent on consumption
human capital
knowledge and skills posed by the workforce
structural unemployment
unemployment caused by mismatch between skills (or location) of job seekers and the requirements (or location) of available jobs
ex. you were a mill worker but there are no more mills to work in so they don’t need you
labor productivity?
amount of output produced by a worker in a given period of time, output per hour
transfer payments?
payments to individuals for which no current good or services are exchanged
what are examples of transfer payments?
social security, welfare, and unemployment benefits
infrastructure?
transportation, communications, education, judicial, and other institutional systems that facilitate market exchanges
explain phillips curve?
essentially it is reversed because the lower the unemployment rate, the higher the inflation because more output is being produced, therefore the reason it is upward sloping backwards is because of the tradeoff between unemployment and inflation
