Krugman Textbook Chapter 8 Flashcards
Employment
The total number of people aged 15 and older currently employed for pay in the economy, either full time or part time.
Unemployment
The total number of people aged 15 and older who are actively looking for work but aren’t currently employed.
Labour Force
The sum of employment and unemployment.
Labour Force Participation Rate
The percentage of the population aged 15 and older that is in the labour force.
Unemployment Rate
The percentage of the total number of people in the labour force who are unemployed.
Discouraged Workers
Individuals who want to work but who have stated to government researchers that they aren’t currently searching for a job because they see a small chance of finding one in the current job market state.
Marginally Attached Workers
Individuals who would like a job and have looked for one in the past, but are not currently searching for one.
Underemployment
The number of people who have jobs that, in certain ways, fall short of what they want.
Visible Employment
The number of people who involuntarily work part-time because they cannot find full time work.
Invisible Employment
The number of people who have jobs that do not fully use their skills or that have one or more qualities that are less than desired, like low pay.
Jobless Recovery
A period where the real GDP growth rate is positive, but the unemployment rate is still rising.
Job Search
When workers spend time looking for employment.
Frictional Unemployment
Unemployment due to time that workers spend looking for employment.
Structural Unemployment
Unemployment due to people seeking jobs in a particular labour market where there aren’t enough jobs at the current wage rate for the amount of people searching, even when the economy is at the peak of its business cycle.
Efficiency Wages
Wages that employers set above the equilibrium wage rate as an incentive for workers to perform their jobs better.
Natural Rate of Unemployment
The unemployment rate that arises from the effects of frictional and structural unemployment.
Cyclical Unemployment
The difference between the actual rate of unemployment and the natural rate of unemployment due to downturns and upturns in the business cycle.
Real Wage
The wage rate divided by the price level.
Real Income
Income divided by the price level.
Shoe-Leather Costs
The increased costs of transactions caused by inflation. Called this because of the footwork caused by running to and from locations to get rid of money.
Menu Costs
The real cost of changing a listed price.
Unit-of-Account Costs
Costs that are caused by the way inflation makes money a less reliable unit of measurement.
Indexing
A way to correct the effect of inflation on the purchasing power of a unit of currency by changing the nominal/dollar value of an item to the inflation rate.
Interest Rate
A percentage that a lender charges a borrower for the use of their savings for one year.
Nominal Interest Rate
The interest rate in dollar terms.
Real Interest Rate
The nominal interest rate minus the inflation rate.
Unexpected Inflation
The difference between the actual and expected inflation rates.
Disinflation
The process of bringing down inflation that has become embedded in expectations.
