Chapter 13: Facing Economic Challenges

Question 1

percent of labor force jobless and looking for work

Answer 1

unemployment rate

Question 2

people over 16 who are working, looking for work

Answer 2

civilian labor force

Question 3

determines unemployment rate

• divides # of unemployed workers by total in civilian labor force
• does not count discouraged who have stopped looking or are underemployed

Answer 3

Bureau of Labor Statistics

Question 4

work part-time, want full-time of works below skill level

Answer 4

underemployed

Question 5

no unemployment caused by decreased economic activity

Answer 5

full employment

Question 6

temporary unemployment, experienced by people changing jobs

Answer 6

frictional unemployment

Question 7

unemployment due to seasonal work

Answer 7

seasonal unemployment

Question 8

unemployment caused by jobs exist but workers are not qualified

Answer 8

structural unemployment

Question 9

unemployment caused by decreased activity in business cycle

Answer 9

cyclical unemployment

Question 10

give an example of frictional unemployment.

Answer 10

• stay-at-home mom/dad
• new college graduates looking for first job
• experienced workers who want to switch jobs

Question 11

give an example of seasonal unemployment.

Answer 11

• construction workers
• tourism
• migrant farms

Question 12

give an example of structural unemployment.

Answer 12

• new technologies replace workers
• require specialized education/training
• change in consumer demand
• offshore outsourcing

Question 13

give an example of cyclical unemployment.

Answer 13

• employers lay off workers during low points in business cycles
• hard to find jobs during recession

Question 14

what are the 4 impacts of unemployment?

Answer 14

1. inefficient - wastes human resources
2. promotes inequality
3. fewer jobs = fewer opportunities to advance
4. lose motivation, discourages workers who lose faith in ability to find a job

Question 15

condition where a person’s income/resources do not allow them to achieve a minimum standard of living

Answer 15

poverty

Question 16

the minimum income needed to pay for the basic expenses of living

Answer 16

poverty threshold (poverty line)

Question 17

percentage of people living in households that have incomes below the poverty threshold

Answer 17

poverty rate

Question 18

the way income is divided among people

Answer 18

income distribution

Question 19

a curve that shows the degree of income inequality in a nation

Answer 19

Lorenz curve

Question 20

government economic and social programs that provide assistance to the needy

Answer 20

welfare

Question 21

a program that requires welfare recipients to do some kind of work

Answer 21

workfare

Question 22

a sustained rise in the general price level or a fall in the purchasing power of money

Answer 22

inflation

Question 23

a measure of changes in the prices of goods and services commonly purchased by consumers

Answer 23

consumer price index

Question 24

measure of changes in wholesale prices

Answer 24

producer price index

Question 25

the rate of change in prices over a set period of time

Answer 25

inflation rate

Question 26

a rapid, uncontrolled rate of inflation in excess of 50 percent per month

Answer 26

hyperinflation

Question 27

a decrease in the general price level

Answer 27

deflation

Question 28

results when total demand rises faster than the production of goods/services

Answer 28

demand-pull inflation

Question 29

results when increases in the costs of production push up prices

Answer 29

cost-push inflation

Question 30

a cycle that begins with increased wages, which lead to higher production costs, which in turn result in higher prices, which result in demands for even higher wages

Answer 30

wage-price spiral

Question 31

poverty rate is based on ______________

Answer 31

population as a whole

- does not hit all sectors of society equally

Question 32

unequal distribution of income; some always exists

Answer 32

income inequality