Social PT 3.1 Flashcards
Refers to a nation’s adult population who, legally, may be employed
Working Age Population
Refers to individuals currently holding a job
Employed
Refers to individuals aged 15 years old and above who are not currently working but are available for work and are presently looking for a job
Unemployed
Refers to individuals who are holding a job that does not match their skills, knowledge, or qualifications
Underemployed
Refers to all “economically active” individuals or those who are currently working or presently looking for work
Labor Force
Is a proportion of the working age population that belongs to the labor force
Labor Force Participation Rate
The proportion of the unemployed persons of the total labor force
Unemployment Rate
Types of Unemployment
Demand Side Unemployment
Cyclical Unemployment
Supply-Side Unemployment
Refers to unemployment driven by the decrease in aggregate demand for goods and services which leads to a decline in economic growth
Demand Side Unemployment
Happens when the demand for goods decreases and companies are forced to lay off workers
Cyclical Unemployment
The opposite of demand deficient unemployment which is the category of unemployment largely driven by the disequilibrium in the labor market
Supply-Side Unemployment
Refers to the situation in which individual are in between jobs
Frictional Unemployment
Is the type of unemployment caused by a job or skills mismatch
Structural Unemployment
Driven by the need to learn new skills
Occupational Structural Unemployment
A type of structural employment linked to mobility issues
Geographical
Automation of previously manual processes
Technological Changes
Type of unemployment that is caused by a rise in real wages
Classical Unemployment
Leads to disequilibrium in which supply of labor is greater than demand
Real Wages Unemployment
Refers to the sum of frictional and structural unemployment
Natural Rate of Unemployment
The unemployment is voluntary
Catallactic Unemployment
All other types of unemployment not considered natural
Institutional Unemployment
Concept wherein inflation and unemployment have a stable and inverse relationship
Phillips Curve
A special case in which there is increasing inflation and rising unemployment is not unheard of
Stagflation
Considers the income from different sectors of the economy
Income Approach
GDP Income Approach Formula
GDP= (Wages+ Rent+ Interest+ Profit) + (Indirect business taxes- Subsidies+ Depreciation)
Expenditure Approach/Aggregate Expenditure Formula
GDP = Y= C+I+G+ NX= AE
Considers the value added in each stage of the production process, which is computed as the difference of production inputs and the price of output
Production Approach/Value-Added Approach
Accounts for the return on the factors of production
Total National Income
Adding net foreign factor income to the income approach
Gross National Income
GNI formula
GNI = GDP + Net Foreign Factor Income
Covers any indirect taxes related to business and depreciation of assets
Business Cash Flow
Is the difference of payments received from foreigners and payments made to foreigners for the use of factors of production
Net Foreign Factor Income
Determines the equilibrium level of real GDP by the point where the total or aggregate expenditures in the economy are equal to the amount of output produced
Keynesian Cross Diagram
Is plotted in the x-axis and is represented by real GDP and is denoted by Y
Actual Expenditure
Is plotted on the y-axis and is represented by aggregate expenditure and is denoted by AE
Planned Expenditure
Is an economic formula that measures the relationship between income and total consumption of goods and services in the economy
Consumption Function
Defined as the amount left over from disposable income after deducting consumption expenditure
Savings
