Chapter 13 Flashcards
Frictional unemployment
Unemployment that occurs when people take time to find a job
Seasonal unemployment
Unemployment that occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season
Structural unemployment
Unemployment that occurs when workers’ skills do not match the jobs that are available
Cyclical unemployment
Unemployment that rises during economic downturns and falls when the economy improves
Census
Official count of the population
Unemployment rate
Percentage of the nation’s labor force that is unemployed
Full employment
Level of employment reached when there is no cyclical unemployment
Underemployed
Working at a job for which one is over qualified or working part time when full time work is desired
Discouraged worker
Person who wants a job but has given up looking
Inflation
General increase in prices
Purchasing power
ability to purchase goods and services
Price index
Measurement that shows how the average price of a standard group of goods changes over time
Consumer price index (CPI)
Price index determined by measuring the price of a standard group of goods meant to represent the “market basket” of typical urban consumer
Market basket
Representative collection of goods and services
Inflation rate
Percentage rate of change in price level over time
Core inflation rate
Rate of inflation excluding the effects of food and energy prices
Hyperinflation
Out of control
Quantity theory
Too much money in economy causes inflation
Demand-pull theory
When demand for goods and services exceeds existing supplies
Cost-push theory
Producers raise prices in order to meet increased costs
Wage-price spiral
Rising wages cause higher prices and higher prices cause higher wages
Fixed income
Does not increase even when prices go up
Deflation
Sustained drop in the price level
Poverty threshold
Income level below which income is insufficient to support a family
Poverty rate
Percentage of people who live in households with income below official poverty line
Income distribution
Nations total income is distributed among its population
Food stamps
Gov issued coupons that recipients exchange for food
Lorenz curve
Illustrates income distribution
Enterprise zone
Area where companies can locate free of certain local state and federal taxes and restrictions
Block grant
Federal funds given to states in lump sums
Workfare
Program requiring work in exchange for temporary assistance
