Chapter 12

Question 1

Frictional unemployment

Answer 1

Unemployment that occurs when people take time to find a job

Question 2

seasonal employment

Answer 2

When harvest schedules or vacations or when industry slow or shut down for a season

Question 3

Structural unemployment

Answer 3

When workers do not have the skills to match the jobs available

Question 4

Cyclical unemployment

Answer 4

Rises during economic downturn’s and falls when the economy improves

Question 5

Purchasing power

Answer 5

The ability to purchase goods and services

Question 6

Quantity theory

Answer 6

Too much money in the economy cause inflation

Question 7

Cost push theory

Answer 7

Inflation occurs when producers raise prices in order to meet increased costs

Question 8

Inflation and income

Answer 8

Erodes income sometimes

Question 9

Fixed income

Answer 9

Income that does not increase when prices go up

Question 10

Trends in inflation in the 1990s

Answer 10

Deflation, low unemployment rate,

Question 11

Consumer price index

Answer 11

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

Question 12

Poverty threshold

Answer 12

The income level below which income is insufficiently to support a family or household

Question 13

Lorenz curve

Answer 13

The curve that illustrates income distribution

Question 14

Income distribution

Answer 14

How the nations total income is distributed to the entire population