Principles of Economics chapter 8 Flashcards
What is unemployment
Unemployment is the number of people who are actively looking for work but aren’t
currently employed.
What is the labor force
The labor force is equal to the sum of employment and unemployment.
What is the labor force participation rate
The labor force participation rate is the percentage of the population aged 16 or older
that is in the labor force.
What is the unemployment rate
The unemployment rate is the percentage of the total number of people in the labor force who are unemployed.
What are discouraged workers
Discouraged workers are nonworking people who are capable of working but have given up looking for a job given the state of the job market.
What are marginally attached workers
Marginally attached workers would like to be employed and have looked for a job in the recent past but are not currently looking for work.
What is underemployment
Underemployment is the number of people who work part time because they cannot find full-time jobs.
What is a jobless recovery
A jobless recovery is a period in which the real GDP growth rate is positive but the unemployment rate is still rising.
What is a job search
Workers who spend time looking for employment are engaged in job search.
What is frictional unemployment
Frictional unemployment is unemployment due to the time workers spend in job search.
What is structual unemployment
In structural unemployment, more people are seeking jobs in a particular labor market than there are jobs available at the current wage rate, even when the economy is at the peak of the business cycle.
What is a minnimum wage
A minimum wage is a government-mandated floor on the wage rate.
What is a union
A union is an organization of workers that bargains collectively with employers to raise
wages and improve working conditions.
What are efficiency wages
Efficiency wages are wages that employers set above the equilibrium wage rate as an incentive for better employee performance.
What is the natural wage of unemployment
The natural rate of unemployment is the unemployment rate that arises from the effects of frictional plus structural unemployment.
What is cyclical unemployment
Cyclical unemployment is the deviation of the actual rate of unemployment from the natural rate due to downturns in the business cycle.
What is the real wage
The real wage is the wage rate divided by the price level.
What is the real income
Real income is income divided by the price level.
What are shoe-leather costs
Shoe-leather costs are the increased costs of transactions caused by inflation.
What are menu costs
The menu cost is the real cost of changing a listed price.
What are the unit-of-account costs of inflation
The unit-of-account costs of inflation are the costs arising from the way inflation makes money a less reliable unit of measurement.
What is the interest rate
The interest rate on a loan is the price, calculated as a percentage of the amount borrowed, that lenders charge borrowers the use of their savings for one year.
What is the nominal interest rate
The nominal interest rate is the interest rate expressed in dollar terms.
What is the real interest rate
The real interest rate is the nominal interest rate minus the rate of inflation.
What is disinflation
Disinflation is the process of bringing the inflation rate down.
