chapter 7: Macroeconomics - Unemployment, Inflation, and Long-Run Growth

These flashcards cover key concepts related to unemployment, inflation, and long-run growth as discussed in Dr. Lucy Asare-Baah's Macroeconomics lecture.

What are the three categories of unemployment?

Frictional unemployment, Structural unemployment, and Cyclical unemployment.

How is the unemployment rate calculated?

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

What is the labor force participation rate?

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

Define discouraged-worker effect.

The decline in the measured unemployment rate when people who want to work but cannot find jobs stop looking and drop out of the labor force.

What components contribute to structural unemployment?

Changes in the structure of the economy that result in job losses in certain industries.

What is cyclical unemployment?

The type of unemployment that occurs when the economy slows down or goes into a recession.

What does the Consumer Price Index (CPI) measure?

A price index computed monthly that represents the market basket purchased by the typical urban consumer.

What is the definition of inflation?

A general increase in prices and fall in the purchasing value of money.

What is productivity growth?

The growth rate of output per worker in the economy.

What are the primary costs of inflation?

Decreased purchasing power for cash holders and potential administrative costs related to keeping up with inflation.