Vocab Page 2 Flashcards
Cyclical Unemployment
This refers to unemployment that rises during economic downturns and falls when the economy improves. It gets it’s name because it varies with the business cycle though it can also be persistent
Structural Unemployment
Unemployment involving a mismatch between the demand for labor and the supply of labor; that is, when there is a mismatch between sufficiently skilled workers looking for jobs and the vacancies available
Classical Unemployment
It occurs when real wages are higher than the market-equilibrium wage. In simple terms, institutions such as “the minimum wage” deter employers from hiring all of the available workers, because the cost would exceed the marginal benefit of hiring them
Hardcore Unemployment
Unemployment that accounts for those unable to work due to mental or physical characteristics
National Output/Product/Gross National Product
Refers to the value of all commodities produced in an economy within a calendar year
Gross Domestic Product
Refers to the value of all commodities produced in an economy within a calendar year + the incomes of our nationals earned abroad - the income of foreigners earned inside the country
Inflationary Gap
This is when Actual National Income is greater than the Potential National Income. It requires a CONTRACTIONARY POLICY to reduce or eliminate it
Expansionary AD Shock
A sudden temporary increase in aggregate demand that causes an increase in national income