Unemployment, Inflation and GDP

Includes full time and part time employment

Employment

A person only working part-time but wants a full time job

Underemployed

Doesn’t work, but makes effort to find work

Unemployed

People who want to work, but have stopped looking

Discouraged Workers

Groups excluded from the labour force

Full time students, Unpaid homemakers, retirees, active military, people under 15 years old, people in the hospital or jail

If you are looking for a job, you aren’t in the labour force (True or False)

False, anyone searching for a job is in the labour force

The percent of people in the labour force who want a job, but aren’t working

Unemployed

What is the formula for unemployment

100 * (# unemployed/# in labour force)

Which GDP isn’t adjusted for Inflation

Nominal GDP (Raw)

Temporary Unemployment (ex: quitting job)

Frictional Unemployment

Changes in the economy make some skills obsolete

Structural Unemployment

Unemployment that results from economic downturns

Cyclical Unemployment

Unemployment due to time of year and nature of the job

Seasonal Unemployment

Pure competition

No limit to number of sellers, no barriers to entry, no price control, and products are all the same

Monopolistic Competition

many buyers and sellers, few to no barriers of entry, some price control, and some product diffrentiation

Oligopoly

few sellers, high barriers, price leadership (closely controlled), product differentiation varies

Monopoly

one seller, high barriers of entry, one seller controls the price, no product differentiation because there is only one seller

What are the three macroeconomic goals?

1. Steady Economic Growth

2. Stable Prices

3. Full Employment

What are the 3 Economic Indicators

1. GDP

2. Inflation/CPI

3. Unemployment

What is GDP

The measure of the economic output/growth of a country.

What is Year-to-year GDP measuring

used to measure a country’s economic growth or decline

What is included in GDP

Included: Final Goods, Customer spending, Business Investment, Government spending, Net exports

Real GDP

GDP adjusted for inflation (shows true growth)

Nominal GDP

the raw number of everything produced with current prices

What is GDP per capita

GDP divided by population- shows each person’s share of the GDP

What is the best way to measure a country’s standard of living

Real GDP

What isn’t included in GDP

Excluded: Intermediate Goods, Second Hand sales, non-market transactions (eg babysitting), financial transactions (eg buying stock), underground economy, transfer payments

Is this included in GDP- $10 for a movie ticket

Yes- Customer spending

Is this included in GDP- 5 million increase in defense expenditures

Yes- Gov.t Spending

Is this included in GDP- $45 for a used book

NO

Is this included in GDP- Ford spending money on new machinery

Yes- Business Investment

Is this included in GDP- Toyota made in Mexico imported into GA

Yes- Imports (subtracted from GDP but still included)

What are the four characteristics of market structures

1. Number of Sellers

2. Barriers to entry

3. Price Control

4. Product Diffrentiation