Unemployment and Inflation

These flashcards cover key concepts related to unemployment and inflation, including definitions and examples.

Unemployment Rate

The percentage of people in the labor force who are unemployed.

Labor Force Participation Rate

The percentage of adults (people 16 and older) in the labor force.

Frictional Unemployment

Unemployment due to the time workers spend in job search.

Structural Unemployment

Unemployment resulting from mismatch between employees and employers, often caused by economic shifts.

Natural Rate of Unemployment

The sum of frictional and structural unemployment, which is always present in the economy.

Cyclical Unemployment

Unemployment caused by economic downturns in the business cycle.

Discouraged Workers

Nonworking individuals who have given up looking for work and are not counted in the unemployment rate.

Marginally Attached Workers

Those who are available and actively sought work recently but are not currently looking.

Underemployed Workers

People working part time because they cannot find full-time jobs.

Inflation Rate

The percentage change in the price level over a specified period.

Real Wages

The wage rate adjusted for inflation, representing the purchasing power of income.

Menu Costs

The costs associated with changing listed prices due to inflation.

Shoe-Leather Costs

The increased costs of transactions caused by inflation, as people attempt to avoid holding cash.

Nominal Interest Rate

The interest rate stated in dollar terms without adjusting for inflation.

Real Interest Rate

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

Jobless recovery

Unit-of-account costs

Efficiency wage costs