Unemployment, Inflation, and Long-Run Growth

A set of vocabulary flashcards based on the economic concepts of unemployment, inflation, and long-run growth.

Unemployment Rate

The ratio of the number of people unemployed to the total number of people in the labor force.

Labor Force

The number of people employed plus the number of unemployed.

Bureau of Labor Statistics (BLS)

A branch of the Department of Labor that conducts surveys to measure unemployment statistics.

Discouraged Worker

Someone who is unemployed but has recently stopped looking for work.

Frictional Unemployment

Unemployment that occurs due to the normal working of the labor market, such as job/skill matching.

Structural Unemployment

Unemployment that results from changes in the economy that lead to job losses in certain industries.

Cyclical Unemployment

Unemployment that occurs above the natural rate of unemployment during economic downturns.

Natural Rate of Unemployment

The unemployment rate that exists when the economy is at full employment, typically between 4% to 6%.

Cost of Living Adjustment (COLA)

Contract clauses that automatically increase wage rates to compensate for inflation.

Gross Domestic Product (GDP) Deflator

A measure of the average price level in an economy, used to adjust nominal GDP to real GDP.

Consumer Price Index (CPI)

A price index that measures the average change over time in the prices paid by consumers for a basket of goods and services.

Producer Price Index (PPI)

Measures prices received by producers for their goods, which can signal future consumer price inflation.

Inflation

An increase in the overall (average) price level of goods and services.

Deflation

A decrease in the overall (average) price level of goods and services.

Labor Force Participation Rate

The ratio of the labor force to the total population aged 16 years or older.

Long-Run Growth

The sustained upward trend in the economy's output over time.

Productivity Growth

The growth rate of output per worker in the economy.

Business Cycle

Short-run fluctuations in economic activity, characterized by periods of expansion and contraction.

Aggregate Demand

The total demand for goods and services within a particular market.

Unemployment Duration

The average length of time that an unemployed worker remains without a job.

Social Consequences of Unemployment

Economic hardship and social issues such as anxiety, depression, and health deterioration due to unemployment.

Costs of Inflation

Economic impacts resulting from rising prices, including changes in income distribution and inefficiencies.

Behavioral Economics

The study of psychological influences on economic decision-making.

GDP Multiple

The factor by which GDP increases over a specified period, often calculated to demonstrate the effects of growth rates.

Technological Improvement

Advances in technology that enhance productivity and efficiency in production processes.

Household Income

Total income received by all members of a household, which must keep pace with inflation.

Nominal Interest Rate

The stated interest rate on a loan, unadjusted for inflation.

Real Interest Rate

The nominal interest rate adjusted for inflation, reflecting the true cost of borrowing.

Menu Costs

Costs associated with changing prices, such as reprinting menus.

Aggregate Supply

The total supply of goods and services available to a particular market from producers.

Economic Standard of Living

The level of wealth, comfort, and material goods available to a certain socioeconomic class or geographic area.

Wage Rate Adjustments

Changes in pay intended to match inflation and cost-of-living increases.

Economic Growth Rate

The rate at which a nation's Gross Domestic Product (GDP) increases over time.

Income Distribution

The way in which a nation’s total income is distributed among its population.

Recession

A period of economic decline characterized by falling GDP and increased unemployment.

Household Factors of Production

Resources owned by households, which influence their potential income generation.

Labor Market

The marketplace where labor is bought and sold, including the supply of workers and demand for jobs.

Long-Term Economic Expectations

Anticipations about future economic conditions that influence financial planning and investment.

Inflation Rate

The percentage increase in the average price level over a specific period.

Employment Rate

The percentage of the labor force that is employed.

Youth Unemployment

The unemployment rate specifically pertaining to individuals between 16 and 24 years old.