Download Economics Glossary: Key Terms in Macroeconomics and Microeconomics and more Quizzes Economics in PDF only on Docsity!
Unemployment
people who do not have a job, have actively looked for work in the past four weeks, and are currently available for work. TERM 2
labor force
DEFINITION 2 number of people 16 and older who are available for employment TERM 3
Frictional employment
DEFINITION 3 results from workers searching for suitable jobs and firms looking for suitable workers TERM 4
Structural unemployment
DEFINITION 4 results from workers not having the skills to obtain long-term employment TERM 5
seasonal unemployment
DEFINITION 5 occurs because of seasonal factors such as weather or fluctuations in the demand for some goods or services during different times of the year.
cyclical umemployment
due to short-term cyclical fluctuations in the economy TERM 7
labor force participation
rate
DEFINITION 7 labor force / working age population TIMES 100 TERM 8
unemployment
rate
DEFINITION 8
of people unemployed / labor force TIMES 100
TERM 9
Consumer price index
DEFINITION 9 measure of the cost of a market basket that represents the consumption of a typical householdCALCULATING: current cost of basket of goods / base period cost of basket of goods TIMES 100 TERM 10
Inflation
DEFINITION 10 rise in the overall price level, which decreases the purchasing power of moneyCALCULATING: (New CPI- Old CPI) / old CPI TIMES 100
intersection of AD and SRAS
yields actual output (Real GDP) and price level TERM 17
long run aggregate supply
DEFINITION 17 represents how much output the country could sustainably produce if utilizing all resources. It is a HYPOTHETICAL measurement and VERTICAL LINE TERM 18
recessionary gap
DEFINITION 18 when actual output is LESS than potential output TERM 19
fiscal policy
DEFINITION 19 use of government purchases, taxes, and transfer payments to alter equilibrium output and the price level TERM 20
discretionary fiscal policy vs. automatic fiscal
policy
DEFINITION 20 Discretionary-actions taken in response to changes in the economy, but they do not follow a strict set of rules; rather, they usesubjectivejudgment to treat each situation in unique mannerautomatic stablizers-When the economy begins to go through an economic fluctuation, automatic stabilizers immediately respond without any official or government body having to take action
budget deficit
when government spending exceeds tax revenue for a given fiscal year TERM 22
budget balance
DEFINITION 22 revenues are equal to expenditures TERM 23
budget surplus
DEFINITION 23 when the government takes in more than it spends TERM 24
what is and what is not money
DEFINITION 24 stocks and bonds are not money; the CARD ITSELF is not money TERM 25
M
DEFINITION 25 narrowest definition of money; includes currency, checkable deposits, and travelers checks
different between monetary and fiscal
policy
monetary manipulates money supply (and interest rates)fiscal policy is a change in government spending or taxation
