Midterm 2 Flashcards
crowding out
decrease in investment that results from government borrowing
financial intermediaries
financial institutions through which savers can indirectly provide funds to borrowers
financial markets
financial institutions through which savers can directly provide funds to borrowers
financial system
the group of institutions in the economy that help to match one person’s saving with another person’s investment
market for loanable funds
the market in which those who want to save supply funds and those who want to borrow to invest demand funds
collective bargaining
the process by which unions and firms agree on the terms of employment
cyclical unemployment
the deviation of unemployment from its natural rate
discouraged workers
individuals who would like to work but have given up looking for a job
efficiency wages
above-equilibrium wages paid by firms to increase worker productivity
frictional unemployment
unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills
labor force
the total number of workers, including both the employed and the unemployed
labor force participation rate
the percentage of the adult population that is in the labor force
structural unemployment
unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one
unemployment insurance
a government program that partially protects workers’ incomes when they become unemployed
union
a worker assocation that bargains with employers over wages, benefits, and working conditions
