Th2: Definitions 5 Flashcards
Real wage unemployment
unemployment caused when wages are set above the equilibrium wage rate
Recession
the trough of the business cycle, when growth is low. the government defines it as where real GDP falls in at least two successive quaters
Retail price index (RPI)
an old measure of inflation which has lost its national statistic status
Savings
the decision by consumers to postpone consumption
Seasonal unemployment
unemployment caused when an industry only operates during certain times of the year
Short run
when at least one factor of production is fixed
Short run aggregate supply (SRAS)
aggregate supply when at least one factor of production is fixed
Short run Phillips curve
shows the relationship between unemployment and inflation - higher levels of unemployment lead to lower levels of inflation
Structural unemployment
unemployment caused by the long-term decline of an industry
Supply-side policies
government policies aimed at increasing the productive potential of the economy and shifting LRAS to the right
Total GDP
the GDP of the whole country
Trade (business) cycle
the tendency of economic growth to rise and fall above and below the trend rate of economic growth, causing booms and busts
Underemployment
those who are working part time, on zero hour contracts or on government training schemes but would prefer to be full time
OR
those employed in areas under their skill level e.g a graduate working at a bar
Unemployed
those who are without work, able to start work in the next 2 weeks and have actively sought work for the last 4 weeks (ILO definiton)
Value of GDP
nominal values of GDP - GDP at current prices
