Chapter 5 - Unemployment and Inflation Flashcards
Unemployment rate :
The percentage of the labour force that’s unemployed
Working-age-population :
Ppl 15 yrs of age and older who are legally entitled to work in Canada
Labour force :
The sum of employed and unemployed workers in the economy
Formula for unemployment rate
(Number of employed / Labour force) x 100
Labour force participation rate :
The percentage of the working-age population in the labour force
Formula for participation rate :
Participation rate = (Labour force / Working-age-population) x 100
Employment-population ratio :
Measure of the portion of the population engaged in paid work
Formula of employment-population ratio
(Number of employed / Working-age population) x 100
Discouraged workers :
Ppl who are available for work but have not looked for a job during the previous 4 weeks bc they believe no jobs are available for them
Employed :
Anyone who did paid work, unpaid work for a family business, or worked fro themselves
Unemployed :
Ppl who don’t have a job but are willing and able to work and have looked for work in the last 4 weeks
Not in labour force :
Ppl who were unable or unwilling to do paid work or ppl who would like to have a job but have given up looking for one
Frictional unemployment :
Short term unemployment that arises from the process of matching workers with jobs.
Structural unemployment :
Unemployment that arises from a persistent mismatch between the skills and attributes of workers and the requirements of jobs
Cyclical unemployment :
Unemployment caused by a business cycle recession
Seasonal unemployment :
Unemployment due to seasonal factors
Natural rate of unemployment :
The normal rate of unemployment, consisting of frictional unemployment + structural unemployment, or the unemployment rate that exists when the economy is at potential GDP
Efficiency wage :
A higher-than-market wage that a firm pays to increase worker productivity
Inflation
A general increase in the prices of goods/services over time
Price level :
Measure of the avg prices of goods/services in the economy
Inflation rate :
The percentage increase in the price level from 1 yr to the next
Consumer price index (CPI) :
Average of the prices of the goods/services purchased by a typical household
Producer price index (PPI) :
An avg of the prices received by producers of goods/services at all stages of production
Prime rate :
Rate at which the most credit worthy business can borrow
