Chapter 13

Question 0

occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules.

Answer 0

Seasonal unemployment

Question 1

occurs when people take time to find a job

Answer 1

Frictional unemployment

Question 2

occurs when workers’ skills do not match the jobs that are available.

Answer 2

Structural unemployment

Question 3

5 major causes of structural unemployment:

Answer 3

The development of new technology.
The discovery of new resources.
Changes in consumer demand.
Globalization 
Lack of education.

Question 4

unemployment that rises during economic downturns and falls when the economy improves.

Answer 4

Cyclical unemployment

Question 5

the percentage of the nation’s labor force that is unemployed.

Answer 5

Unemployment rate

Question 6

the level of employment reached when no cyclical unemployment exists.

Answer 6

Full employment

Question 7

working at a job for which they are over-qualified, or working part-time when they desire full-time work.

Answer 7

Underemployment

Question 8

person who wants a job but has given up looking.

Answer 8

Discouraged worker

Question 9

a general increase in prices.

Answer 9

Inflation

Question 10

the ability to purchase goods and services.

Answer 10

Purchasing power

Question 11

measurement that shows how the average price of a standard group of goods changes over time.

Answer 11

Price index

Question 12

price index determined by measuring the price of a standard group of goods meant to represent the “market basket” of a typical urban consumer

Answer 12

Consumer price index

Question 13

a representative collection of goods and services.

Answer 13

Market basket

Question 14

the percentage rate of change in price level over time.

Answer 14

Inflation rate

Question 15

the rate of inflation excluding the effects of food and energy prices.

Answer 15

Core inflation rate

Question 16

inflation that is out of control.

Answer 16

Hyperinflation

Question 17

too much money in the economy causes inflation.

Answer 17

Quantum theory

Question 18

inflation occurs when demand for goods and services exceeds existing supplies

Answer 18

Demand pull theory

Question 19

inflation occurs when producers raise prices in order to meet increased costs.

Answer 19

Cost push theory

Question 20

the process by which rising wages cause higher prices, and higher prices cause higher wages.

Answer 20

Wage price spiral

Question 21

income that does not increase even when prices go up.

Answer 21

Fixed income

Question 22

a sustained or drop in the price level.

Answer 22

Deflation

Question 23

the income level below which income is insufficient to support a family or household.

Answer 23

Poverty threshold

Question 24

the percentage of people who live in households with income below the official poverty threshold.

Answer 24

Poverty rate

Question 25

how the nation’s total income is distributed among its population

Answer 25

Income distribution

Question 26

government-issued coupons that recipients exchange for food

Answer 26

Food stamps

Question 27

illustrates income distribution

Answer 27

Lorenz curve

Question 28

area where companies can locate free of certain state, local, and federal taxes and restrictions.

Answer 28

Enterprise zones

Question 29

federal funds given to the states in lump sums.

Answer 29

Block grant

Question 30

program requiring work in exchange for temporary assistance.

Answer 30

Workfare