Macro Definitions

Question 1

Inflation

Answer 1

Sustained increase in the overall price level. Rent

Question 2

Nominal salary vs real salary

Answer 2

The number of dollars vs the purchasing power

Question 3

Shoe leather costs

Answer 3

The effects inflation has on people (changing where they shop, etc)

Question 4

Benefits of inflation

Answer 4

People who borrowed money at fixed interest rates pay back amounts that are worth less.

Question 5

Frictional unemployment

Answer 5

Leaving a job to seek another on due to specific changes in your life (you’re moving, you’re getting an education, you’re changing careers, etc)

Question 6

Cyclical unemployment

Answer 6

Jobless because of the times (how the economy is currently fairing)

Question 7

Discouraged worker

Answer 7

Somebody who wants to and is able to work, but can’t find any so stops looking. Ex: a woman quits her job to be a stay at home mother, but can’t find work 20 years later so gives up on looking.