exam 1 Flashcards
employed
full time, part time, temporary, has a job but on temporary leave, an unpaid family worker that works at least 15 hours a week
unemployed
people who are not working but seeking employment
out of labor force
retired, in school full time, incarcerated, under 16, armed forces
unemployment rate
unemployed population/labor force =
% of labor force unemployed
labor participation rate
labor force/ non-institutionalized civilians over 16
natural state of unemployment
unemployment between economic boom and recession
frictional unemployment
short-term, often voluntary unemployment between jobs
cyclical unemployment
the difference between current unemployment rate and full employment, caused by recession
structural unemployment
caused by changes in consumer demand, obsolesence,
real GDP
Gross Domestic Products, total value of final goods and services produced by a country in a year, measured using prices in the previous year, compounds
real GDP per capita
real GDP/population
rough estimate of standard of living
What counties have the highest GDP?
India, China, the EU, Great Britain, and the US produce 3/4 of the words GDP
compounding
small increases in GDP compound into bigger gains
business cycle
increases and decreases in economic activity; peak, recession, trough, recovery
income equation of GDP
labor of wages + corporate profits + proprietor income+ rental income + net interest + depreciation
expenditure equation of GDP
C + I + G+(X-M)
C:personal consumption
I: Gross private domestic investment
G: government spending
X-M: Net exports
Lorenz curve
visual indicator of inequality
y axis: cummulative % of income
x axis: cummulative % of population
Further the Lorenz curve is from the line of perfect equality, the more unequal a country is
gini coefficent
A(space to the right of line of perfect equality) / A + B
(total area under line of perfect equality)
absolute poverty
universal, 1-2 dollar a day income, basic needs not met
relative poverty
percentage level of median income, survival not threatened, social exclusion
discouraged workers
unemployed workers who have given up looking for work
benefits of economic inequality
- wealthy invest in new products that benefit all
- people can pursue their passions and are rewarded for their efforts
