Unemployment types, Market structures, and economic indicators - Unit 3 Exam

Cyclical Unemployment

Unemployment directly related to the business cycle

Seasonal Unemployment

Unemployment where changes in weather between seasons or the demand for certain products or services causes workers to be laid off

Frictional Unemployment

A common type of unemployment where a worker is in between jobs for any reason.

Structural Unemployment

Demand for certain workers reduces because of consumers changing what they prefer and their overall taste or basic changes in the operations of the business.

Technological Unemployment

When workers are replaced by technology such as machinery or automated systems that possesses the same abilities that the workers had.

Pure Competition

A theoretical market structure with three main conditions

What are the three main conditions of pure competition

There must be very many buyers and sellers, all the buyers and sellers deal in identical products, and buyers and sellers are free to enter into, conduct, or get out of business.

Monopolistic Competition

A market structure that has all the conditions of pure competition, except for identical products, product differentiation, and non price competition.

Product differentiation

Real or imaginary differences between competing products in the same industry

Non price competition

Competition based on a product’s appearance, quality, or design, rather than it’s price

Monopoly

When one seller of a particular product dominates the industry, the complete opposite of pure competition

Oligopoly

Few sellers of a particular product that dominates the industry

Natural monopoly

A single firm producing a product much more cheaply than any other competing firms

Technological monopoly

A monopoly that dominates the market based on ownership or control of a manufacturing method, process, or inventions ex. Apple controls what apps go on the app store

Geographic monopoly

A monopoly that dominates the market because it is the only firm of that kind in its location

Government monopoly

A monopoly owned and operated by the government

ex. the US Postal Service or the DMV

How does the goverment break apart monopolies?

They stop certain companies from forming, issue rules, break up companies into their start ups

Inflation

an upwards movement in the average level of price

What are the two causes of inflation?

Demand-pull inflation and Cost-push inflation

Demand-pull inflation

Aggregate demand exceeds aggregate supply and consumers bid up prices

Cost-push inflation

Sustained increases in the cost of product cause the price of a product to rise, resources used for production increasing in price leads to an increase in product price

GDP

The main measure of overall economic activity, is the value of all final goods and services produced within a nation’s borders

GNP

The value of all final goods and services produced by a nation’s companies, country borders don’t matter

Nominal GDP

Doesn’t take inflation into account

Real GDP

Takes inflation into account by measuring GDP in constant, or unchanging prices, uses a certain year as a comparison (ex. 2011 currently)

What are the three approaches for GDP

output method, expenditure method, and income method

Unemployment rate

The percent of people that want jobs but can’t get jobs, the higher the unemployment rate is the the worse the economy is doing

What kind of relationship does GDP and unemployment have

An inverse relationship, when GDP increases, unemployment decreases and vice versa.