Chapter 21 Flashcards
1
Q
Inflation
A
The increase in the price level over time
2
Q
Deflation
A
The decrease in the price level over time
3
Q
Consumer price index
A
Weight average of the price paid by consumers during a given period (fixed basket of goods
4
Q
Limitations of CPI
A
Quality change
New goods
Commodity substitution
Location substitution
5
Q
Why does unemployment matter
A
Direct: less production. Less income
Indirect: loss of human capital
6
Q
What 2 criteria do you need to meet to be considered unemployed
A
No job
Actively seeking or wanting a job
7
Q
Types of unemployed workers
A
Marginally attached workers.
Discouraged workers
8
Q
Types of unemployment
A
Frictional unemployment
Structural unemployment
