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Econ 1022 > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

The working population includes…

A

Employed and unemployed people

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2
Q

True or false.
The working age population the number of people aged 15 and over

A

True

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3
Q

How to calculate the unemployment rate?

A

umemployed/ labour force x 100

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4
Q

How to calculate the involuntary-part time Rate?

A

number of involuntary worker/ labour force x 100

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5
Q

How to calculate the labour force rate?

A

labour force/ working age population rate x 100

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6
Q

How to calculate the employment rate?

A

employment/ working age population x 100

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7
Q

How many types does unemployment have?

A

3 types

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8
Q

What are the 3 types of unemployment?

A

Frictional: arises from normal labour market turnover, job creation and labour force
Structural: created by changes in tech and foreign competition that change the skills needed
Cyclical: due to business cycle movements

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9
Q

“Natrual unemployment” is…

A

when there is both structural and frictional changes and there is no cyclical unemployment

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10
Q

Full employment is…

A

unemployment rate = natural unemployment rate

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11
Q

Output Gap is…

A

Real GDP minus Potential GDP

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12
Q

Price level is…

A

the average level of prices and the value of money

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13
Q

CPI is calculated using the formula…

A

Cost of current + Cost of Base x 100

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14
Q

Inflation equals…

A

(CPI this year - CPI last year)/ CPI last year x 100

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15
Q

New good bias…

A

new goods that were not avaliable in the base year appear, if they are more expensive than the goods they replace, they put an upward into CPI

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16
Q

Quality change bias…

A

Quality improvements occur every year. Part of the rise in price is payment for improved quality and is not inflation

17
Q

Commodity substituion bias…

A

the market basket of goods used in calculating the CPI is fixed and does not take into account consumers substitutions away from goods whose relative prices increase

18
Q

Outlet substitution bias…

A

people switch to buying from cheaper sources but the CPI as measure does not take into account of this

19
Q

GDP Deflator…

A

Nomial GDP/ Real GDP x 100

20
Q

True or False.
As more people enter the labour force the participation rate rises and so does unemployment

A

True

21
Q

Calculate the real price of an item

A

Current price/ CPI x 100

22
Q

When the UR greater than the NUR the ouput gap is…

A

Neagtive

23
Q

When the UR is less than the NUR the ouptgap is…

A

Positive

Econ 1022 (4 decks)

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