Chapter5 Econ

These flashcards encompass key definitions and concepts related to employment, unemployment, inflation, and economic measures from the lecture notes.

Real GDP

The economic output adjusted for inflation, reflecting the actual value of goods and services produced.

Potential GDP

The highest level of real GDP that can be sustained over time without increasing inflation.

Business Cycle

The periodic but irregular up-and-down movement of total production in the economy.

Expansion Phase

The phase in the business cycle where economic activity rises, leading to an increase in real GDP.

Recession Phase

The phase in the business cycle when real GDP declines for at least two consecutive quarters.

Unemployment Rate

The percentage of the labor force that is unemployed.

Labor Force Participation Rate

The percentage of the working-age population that is part of the labor force.

Frictional Unemployment

Unemployment that occurs when people are temporarily between jobs or are entering the labor force.

Structural Unemployment

Unemployment resulting from changes in the economy that create mismatches between skills needed and those available.

Cyclical Unemployment

Unemployment that results from economic recessions and downturns.

Natural Unemployment Rate

The level of unemployment that occurs when the economy is at full employment, consisting of frictional and structural unemployment.

Output Gap

The difference between real GDP and potential GDP, indicating whether the economy is underperforming or overperforming.

Discouraged Workers

Individuals who would like to work but have stopped looking for jobs because they believe no jobs are available.

Hyperinflation

An extremely high and typically accelerating rate of inflation, often exceeding 50% per month.

Economic Part-time Workers

Part-time workers who desire full-time work but are unable to find full-time positions.

Marginally Attached Workers

Individuals not currently in the labor force who want and are available for a job and have looked for work in the recent past.

Labor Market Indicator

Metrics that help measure the health of the labor market, including unemployment rate, employment-to-population ratio, and labor force participation rate.

Inflation Rate

The rate at which the general level of prices for goods and services is rising.

Deflation Rate

The rate at which the general level of prices for goods and services is falling.

Peak

The high point in the business cycle where economic activity is at its highest.

Trough

The low point in the business cycle where economic activity is at its lowest.