Unemployment And Inflation Flashcards
What does real income measure
Amount of goods/services nominal income will buy
What are nominal and real GDP measures in terms of
Money, goods and services
Types of unemployment ?: frictional, structural, cyclical
Quit fired graduated seasonal, technological(replaced by machine) , downturn in business cycle
An increase in real GDP means what
Increase in income
Two main ways realm GDP goes
Increase in in
It’s, increase in productivity
Four phases of business cycle
Expansion an upturn, increase in real GDP
Peak - real GDP Reaches max
Recession real GDP declines -6 months
Trough real GDP reaches minimum
Stagflation
Inflation and unemployment exist at the same time
Recession depression , Great Depression
GDP decreases for two quarters (6 months, unemployment 12%, )
GDP decreases for most quarters (over 3 year period, 12-20% )
Over 6 years
Frictional
Temporary, graduate, weather dependent jobs
Structural is
Long term and makes skills obsolete
Cyclical means
Economic downturn , , durable good jobs affected the most, they can be postponed and do come back, real unemployment
Natural unemployment rate
Sum of frictional and structural
Full employment
When natural unemployment is equal to unemployment rate
Cyclical unemployment rate
Difference between unemployment and natural, implies a recession
Employed person
1 or more hours per week, 16+, who works without pay 15 hours for family enterprise or has been absent but has a job
