Key terms - Monitoring jobs and inflation Flashcards
Consumer prices index (CPI) / Retail prices index (RPI)
Measure an average of the prices paid by consumers for a fixed ‘basket’ of goods.
Cyclical unemployment
The higher than normal unemployment at a business cycle trough and the lower than normal unemployment at a business cycle peak.
Deflation
A persistently falling price level.
Discouraged worker
Someone who is available and willing to work but who has stopped looking for a job because of repeated failure to find one.
Economic activity rate
The percentage of the working-age population who are economically active; members of the workforce.
Economically active/workforce
People who have a job or are willing and able to take a job.
Economically inactive
People who don’t want a job.
Employment rate
The percentage of people of working age who have jobs.
Frictional unemployment
The unemployment that arises from people entering and leaving the workforce and from an ongoing process of job creation and destruction.
Full employment
A situation in which the unemployment rate equals the natural unemployment rate.
GDP deflator
An index of the prices of all the items in GDP.
Hyperinflation
An inflation rate of 50% a month or higher that grinds the economy to a halt and society to a collapse.
Inflation
A persistently rising price level.
Inflation rate
The percentage change in price level from one year to the next.
Natural unemployment rate
Natural unemployment as a percentage of the workforce.
Natural unemployment = arises from frictions and structural change when there is no cyclical employment.
Output gap
The gap between real GDP and potential GDP.
Price level
The average level of prices and the value for money.
Reference base period
The RPI is defined to equal 100 for a period called the reference base period; currently January 1987.
Structural unemployment
Arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs.
Unemployment rate
The percentage of economically active people who are unemployed.
Working age population
The total number of people aged 16 to 24 who are not in prison, hospital, or some other form of institutional care.
