econ 2105

  1. Shoe-leather costs
    increase transaction cost from inflation
  2. Menu cost
    • real cost of changing a
    • listed price.
  3. Unit-of-account costs
    • inflation makes money a less reliable unit of
    • measurement
  4. nominal interest rate
    interest rate expressed in dollar terms.
  5. real interest rate
    • nominal interest rate minus the rate of
    • inflation.
  6. Disinflation
    process of bringing the inflation rate down.
  7. Real income
    income divided by the price level
  8. real wage
    wage rate divided by the price level.
  9. The natural rate of
    • normal unemployment rate around which the
    • actual unemployment rate fluctuates
  10. Cyclical unemployment
    • deviation in the actual rate of unemployment
    • from the natural rate
  11. Efficiency wages
    incentive for better performance.
  12. Side effects of government
    • help workers who lose their jobs
  13. Structural unemployment
    more people seeking jobs in a labor market than there are jobs available
  14. Frictional unemployment
    • unemployment due to the time workers spend in
    • job search
Card Set
econ 2105
chapter 6 econ