econ ch 4

The study of the operation of the economy as a whole

Legislation givin gthe federal government the right and responsibility to provide an environment for the achievement of full employment, full production and stable prices.

A resource available for production is not being used.

Occurs when people are voluntarily out of work for a short period of time while searching for a job.

Occurs when only those voluntarily out of work are unemployed, or the unemployment rate includes only frictional unemployment.

Involuntary unemployment that results from a downswing in a business cycle or a rcession.

Involuntary unemployment that results when a worker's job is no longer part of the production structure of the economy.

All persons 16 years of age and older who are working or actively seeking work.

The percentage of some specified group that is in the labor force.

The percentage of the labor force that is unemployed and actively seeing work.

Persons who drop out of the labor force because they have been unsuccessful for a long period of time in finding a job.

A resource is not used to its fullest productive capability.

The unemployment rate that includes the frictionally and structurally unemployed; occurs when cyclical unemployment is eliminated.

An increase in the general level of prices.

Extremely rapid increases in the general level of prices.

Income measured in terms of current dollars.

Income measured in terms of the goods and services that can be purchased with a particular amount of money income.

An arrangement whereby an individual's wates automatically increase with inflation.

The price of money; determines the return to savers and leanders of money, and the cost to borrowers.

The nominal, or stated, rate of interest minus the inflation rate; a nominal interest rate adjusted for inflation.

A measure of the value of tangible assets; includes such items as real estate and corporate securities.

Presure on prices from the buyers' side of the market; tends to occur when spending its greater than the productive capability of hte economy

Pressure on prices from the sellers' side of the market, particularly from increases in costs of production.

Measures changes in the price of an item or a group of items using a percentage scale

This year against which prices in other years are compared ina price index; given the index number 100.

Measures changes in the prices of goods and services that consumers typically purchase, such as food, shelter, clothing and medical care.

Measures changs in the prices of goods that businesses buy, either for further processing or for sale to a consumer.

The price index used when calculating price chagnes for the entire economy

A sustained decrease in the general level of prices.

A slowing of the inflation rate.

The creation of goods and services.

Occurs when an economy is producing at its maximum capacity, or when it is experiencing full employment

An increase in an economy's full production output level over time.

Increase in knowledge about production and its processes

Investments, such as formal education, that increase the productivity of people

A dollar figure that measures the value of all finished goods and services produced in an economy in 1 year.

Measures the value of production in terms of prices at the time of production.

Money GDP adjusted to eliminate inflation; measures real production.

Productive activities that are not reported for tax purposes and are not included in GDP.

Concept of assessing the amount of output produced by an economy's resourcs; often measured specifically by output per worker.