Unemployment and Inflation

Flashcards reviewing concepts of unemployment, types of unemployment, inflation, causes of inflation, demand-pull inflation, and cost-push inflation.

Unemployment Rate

The percentage of the civilian labor force that is without a job but actively seeking one.

Cyclical Unemployment

Fluctuations in unemployment due to the cyclical nature of the economy (recessions and expansions).

Structural Unemployment

Unemployment resulting from changes in the structure of the economy.

Seasonal Unemployment

Unemployment linked to seasonal changes in employment conditions.

Frictional Unemployment

Temporary unemployment that arises from the normal job search process.

Inflation

A sustained increase in the general price level of goods and services in an economy over a period of time.

Demand-Pull Inflation

Increase in prices is the result of excessive demand.

Cost-Push Inflation

Inflation caused by an increase in the costs of production, leading to a decrease in aggregate supply.

Stagflation

A situation characterized by high inflation and high unemployment, occurring simultaneously in an economy.

Four areas of spending

Spending by consumers, spending by businesses, spending by government, and spending on net exports.