econ ch 4

  1. Macroeconomics
    The study of the operation of the economy as a whole
  2. Employment Act of 1946
    Legislation givin gthe federal government the right and responsibility to provide an environment for the achievement of full employment, full production and stable prices.
  3. Unemployment
    A resource available for production is not being used.
  4. Frictional Unemployment
    Occurs when people are voluntarily out of work for a short period of time while searching for a job.
  5. Full Employment
    Occurs when only those voluntarily out of work are unemployed, or the unemployment rate includes only frictional unemployment.
  6. Cyclical Unemployment
    Involuntary unemployment that results from a downswing in a business cycle or a rcession.
  7. Structural Unemployment
    Involuntary unemployment that results when a worker's job is no longer part of the production structure of the economy.
  8. Labor Force
    All persons 16 years of age and older who are working or actively seeking work.
  9. Participation Rate
    The percentage of some specified group that is in the labor force.
  10. Unemployment Rate
    The percentage of the labor force that is unemployed and actively seeing work.
  11. Discouraged Workers
    Persons who drop out of the labor force because they have been unsuccessful for a long period of time in finding a job.
  12. Underemployment
    A resource is not used to its fullest productive capability.
  13. Natural Rate of Unemployment
    The unemployment rate that includes the frictionally and structurally unemployed; occurs when cyclical unemployment is eliminated.
  14. Inflation
    An increase in the general level of prices.
  15. Hyperinflation
    Extremely rapid increases in the general level of prices.
  16. Money (Nominal) Income
    Income measured in terms of current dollars.
  17. Real Income
    Income measured in terms of the goods and services that can be purchased with a particular amount of money income.
  18. Cost of Living Adjusment (COLA)
    An arrangement whereby an individual's wates automatically increase with inflation.
  19. Interest Rate
    The price of money; determines the return to savers and leanders of money, and the cost to borrowers.
  20. Real Rate of Interest
    The nominal, or stated, rate of interest minus the inflation rate; a nominal interest rate adjusted for inflation.
  21. Wealth
    A measure of the value of tangible assets; includes such items as real estate and corporate securities.
  22. Demand-Pull Inflation
    Presure on prices from the buyers' side of the market; tends to occur when spending its greater than the productive capability of hte economy
  23. Cost-Push Inflation
    Pressure on prices from the sellers' side of the market, particularly from increases in costs of production.
  24. Price Index
    Measures changes in the price of an item or a group of items using a percentage scale
  25. Base Year
    This year against which prices in other years are compared ina price index; given the index number 100.
  26. Consumer Price Index (CPI)
    Measures changes in the prices of goods and services that consumers typically purchase, such as food, shelter, clothing and medical care.
  27. Producer Price Index (PPI)
    Measures changs in the prices of goods that businesses buy, either for further processing or for sale to a consumer.
  28. GDP Price Index
    The price index used when calculating price chagnes for the entire economy
  29. Deflation
    A sustained decrease in the general level of prices.
  30. Disinflation
    A slowing of the inflation rate.
  31. Production
    The creation of goods and services.
  32. Full Production
    Occurs when an economy is producing at its maximum capacity, or when it is experiencing full employment
  33. Economic Growth
    An increase in an economy's full production output level over time.
  34. Technology
    Increase in knowledge about production and its processes
  35. Human Capital Investments
    Investments, such as formal education, that increase the productivity of people
  36. Gross Domestic Product (GDP)
    A dollar figure that measures the value of all finished goods and services produced in an economy in 1 year.
  37. Money GDP (Current, or Nominal, GDP)
    Measures the value of production in terms of prices at the time of production.
  38. Real GDP (Constant GDP)
    Money GDP adjusted to eliminate inflation; measures real production.
  39. Underground Economy
    Productive activities that are not reported for tax purposes and are not included in GDP.
  40. Productivity
    Concept of assessing the amount of output produced by an economy's resourcs; often measured specifically by output per worker.
Card Set
econ ch 4
ch 4 vocab