Economics Unit 4 Economic Indicators

Frictional unemployment

Unemployment that occurs when people take time to find a job

Structural unemployment

Unemployment that occurs when workers' skills do not match the jobs that are available

Seasonal unemployment

Unemployment associated with the seasons and/or weather

Cyclical unemployment

Unemployment that rises during economic downturns and falls when the economy improves

Underemployed

Employed only part-time when one needs full-time employment or employed in a position you are overqualified for

Workforce

All of the people 16 years or older who are employed or who are looking for a job

Poverty threshold

An income level below that which is needed to support families or households

Poverty rate

Percentage of people whose income falls below the poverty threshold

Inflation

a general increase in prices

Purchasing power

Value of money, as measured by the quantity and quality of products and services it can buy

Consumer Price Index (CPI)

A measure of the overall cost of the goods and services bought by a typical consumer

Chronic inflation

Inflation that rises steadily from month to month over a long period.

Creeping inflation

When price levels rise at fairly low rates

Hyperinflation

Inflation that is out of control

Current dollars

The value of the dollar in the year for which it is being reported

Constant dollars

Dollars or money adjusted for inflation

Demand-pull theory

Theory that inflation occurs when demand for goods and services exceeds existing supplies

Cost-push theory

Theory that inflation occurs when producers raise prices in order to meet increased costs

Quantity theory

Theory that too much money in the economy causes inflation

Gross domestic product

The dollar amount of all final goods and services produced within a country's borders in a year.

Gross national product

The total value of goods and services, including income received from abroad, produced by the residents of a country within a year

Final goods

Finished goods and services produced for consumers

Intermediate goods

Goods used in the production of final goods

Trade deficit

When a country imports more than it exports

Trade surplus

Situation in which a country exports more than it imports

Income

Earnings from work or investments

Wealth

The total value of money and other assets, minus outstanding debts

Full employment

the economic condition when everyone who wishes to work is employed - having zero cyclical unemployment

Expenditure approach

Measuring GDP by adding the value of goods and services purchased within a country

Income approach

The approach to GDP measurement that determines GDP as the sum of all incomes earned by a country in a given year