Employment, Unemployment, and Inflation

This set of flashcards covers key vocabulary related to employment, unemployment, and inflation.

Unemployment

The state of being without a job despite actively seeking work.

Labour Force Survey

A monthly survey conducted by Statistics Canada that asks about employment status in 54,000 households.

Unemployment Rate

The percentage of the labor force that is unemployed, calculated as (number of unemployed/labour force) x 100.

Involuntary Part-Time Rate

The percentage of the labor force who work part-time but desire full-time jobs, calculated as (number of involuntary part-time workers/labour force) x 100.

Labour Force Participation Rate

The percentage of the working-age population that is part of the labor force, calculated as (labour force/working-age population) x 100.

Employment Rate

The percentage of the working-age population that has jobs, calculated as (employment/working-age population) x 100.

Discouraged Searchers

Individuals not currently looking for work who want a job and have looked in the recent past but stopped due to repeated failures.

Frictional Unemployment

Unemployment that arises from normal labor market turnover; it is generally temporary.

Structural Unemployment

Unemployment caused by changes in technology or foreign competition that alter the skills required for jobs.

Cyclical Unemployment

Unemployment linked to the business cycle, occurring during economic recessions.

Natural Unemployment

The unemployment that arises from normal frictions and structural changes in the economy when there is no cyclical unemployment.

Potential GDP

The quantity of real GDP produced at full employment, representing the economy's capacity to produce output sustainably.

Inflation

A persistent increase in the average price level of goods and services.

Consumer Price Index (CPI)

A measure of the average prices paid by urban consumers for a fixed basket of goods and services.

Inflation Rate

The percentage change in the price level measured by the CPI from one year to the next.

New Goods Bias

The tendency of the CPI to overstate inflation due to the introduction of new goods that may be more expensive than those they replace.

Quality Change Bias

The CPI may overstate inflation because part of price increases may be due to improvements in product quality.

Core Inflation Rate

An inflation measure that excludes volatile prices in the CPI basket to reveal underlying inflation trends.