Chapter 6 Flashcards
On what is the CPI based?
A representative group of goods and services (market basket) purchased by a typical household.
Price Level
Weighted average of the prices of all goods and services
PPI
Measures the cost of production of goods.
Prices measured at the point at which the goods enter the supply chain for the first time.
Includes capital and intermediate expenses
Base period
A year relatively to which the CPI/PPI is measured and calculated. The base period is always 100.
Inflation
Continued increase in the general price level.
Inflation rate
Growth rate of a price index.
Real income
The purchasing power of the income.
What one can afford to buy with the money.
Working age population
People 16 - 64 years of age.
Broad labor force
Those of the working-age labour force who are willing and able to work. (INCLUDES discouraged work-seekers)
Narrow labour force
Those of the working age labour force who are willing and able to work, excluding discouraged work-seekers.
Discouraged work-seekers
- those in the Broad labour force
- are unemployed in the reference period
- available to work but did not take active steps to find a work during the last 4 weeks before the interview.
Valid reasons for a why discouraged work-seeker is not actively searching:
- No jobs available in the area
- ## Unable to find a job that requires his skills
Broad Economically inactive population
Those too young/too old to work.
Those who form part of the working age but are not willing nor able to work.
Narrow definition of economically inactive population.
- Those too young/too old to work
- Those not willing or not able to work
- Discouraged workseekers
Employed
Those in the broad labour force who performed work for pay, profit or family, for at least one hour prior to the reference week or who were temporarily absent from work.
Five types of unemployment:
- Frictional unemployment
- Structural unemployment
- Natural unemployment
- Cyclical unemployment
- Seasonal unemployment
