Chp21 - Monitoring Job & Inflation Flashcards
0
Q
Working-Age Population
A
- # of people 15 years or older
1
Q
Why is Unemployment an Issue?
A
- Lost incomes and production
- Lost human captial
2
Q
Labour Force
A
- Full-time/Part-time employed plus those actively looking for employment
3
Q
Criteria for Unemployment
A
- Without work, but has made specific efforts to find a job within the previous four weeks
- Laid off from a job and waiting to be called back to work
- Waiting to start a new job within four weeks
4
Q
Labour Market Indicators
A
- Unemployment Rate (#of unemployed/Labour Force x 100)
- Involuntary Part-Time Rate (#of IP-T/Labour Force x 100)
- Labour Force Participation (Labour Force/Working Age pop. x 100)
- Employment to Pop. Ratio (#of employed/Working Age pop. x 100)
5
Q
Frictional Unemployment
A
- arises from people entering/leaving job force from the normal job destruction/creation
- Healthy, Permanent phenomenon in an economy
6
Q
Structural Unemployment
A
- Arises when changes in tech. or international competition change skills needed to perform a job or the location of the job respectively
- Lasts longer than frictional due to the need to retrain or relocate workers
7
Q
Cyclical Unemployment
A
- The higher than normal unemployment at a business cycle trough, and the lower than normal unemployment at a business cycle peak
8
Q
‘Natural’ Unemployment
A
- Unemployment from Frictional and Structural unemployment where there is no Cyclical Unemployment
- Natural Employment Rate: when expressed as a percentage of the labour force
9
Q
Full Unemployment
A
- situation in which the unemployment rate equals the natural unemployment rate
10
Q
Factors Influencing Natural Unemployment
A
- The age distribution of the population
- The scale of structural change
- The real wage rate
- Unemployment benefits
11
Q
Unemployment over the Business Cycle
A
- unemployment rate fluctuates around the natural unemployment rate
- Full Employ: UR = NUR & RealGDP = Poten.GDP
- UN < NUR: RealGDP > Poten.GDP
- UN > NUR: RealGDP < Poten.GDP
- The timing of these do not match up perfectly (Unemployment follows GDP)
12
Q
Price Level
A
- The average level of prices
- Inflation = persistently rising price level
- Deflation = persistently falling price level
- want to measure the annual percentage change of price level (inflation or deflation rate)
- want to distinguish between the money values and real values of economic variables
13
Q
Unexpected Inflation or Deflation Causes
A
- Redistribution of Income
- Redistribution of Wealth
- Raises/Lowers Real GDP and Employment (Inflation/Deflation)
- Diverts Resources from Production
14
Q
Hyperinflation
A
- inflation rate of 50% a month or higher
