HomeKey Terms – Chapter 7 Unemployment – The number of people 16 or older who are willing and able to work, actively looking for a job, but cannot find one. Labor Force – The total number of employed and unemployed people actively seeking work. Frictional Unemployment – Temporary unemployment while workers search for a new job. Structural Unemployment – Long-term unemployment caused by a mismatch between workers’ skills and available jobs. Cyclical Unemployment – Unemployment caused by a recession or downturn in the economy. Inflation – A sustained increase in the overall price level of goods and services. Deflation – A sustained decrease in the overall price level of goods and services. Purchasing Power – The value of money in terms of what it can buy. Price Index – A measure that compares the cost of a market basket today to the cost in a base year. Consumer Price Index (CPI) – A measure of the average prices paid by consumers for goods and services. Real Rate of Interest – The nominal interest rate minus the inflation rate. Nominal Rate of Interest – The stated interest rate not adjusted for inflation. Recession – A period when economic activity declines for a sustained time. Depression – An extremely severe and prolonged recession. 7 Unemployment – The number of people 16 or older who are willing and able to work, actively looking for a job, but cannot find one. Labor Force – The total number of employed and unemployed people actively seeking work. Frictional Unemployment – Temporary unemployment while workers search for a new job. Structural Unemployment – Long-term unemployment caused by a mismatch between workers’ skills and available jobs. Cyclical Unemployment – Unemployment caused by a recession or downturn in the economy. Inflation – A sustained increase in the overall price level of goods and services. Deflation – A sustained decrease in the overall price level of goods and services. Purchasing Power – The value of money in terms of what it can buy. Price Index – A measure that compares the cost of a market basket today to the cost in a base year. Consumer Price Index (CPI) – A measure of the average prices paid by consumers for goods and services. Real Rate of Interest – The nominal interest rate minus the inflation rate. Nominal Rate of Interest – The stated interest rate not adjusted for inflation. Recession – A period when economic activity declines for a sustained time. Depression – An extremely severe and prolonged recession

Key Terms – Chapter 7 Unemployment – The number of people 16 or older who are willing and able to work, actively looking for a job, but cannot find one. Labor Force – The total number of employed and unemployed people actively seeking work. Frictional Unemployment – Temporary unemployment while workers search for a new job. Structural Unemployment – Long-term unemployment caused by a mismatch between workers’ skills and available jobs. Cyclical Unemployment – Unemployment caused by a recession or downturn in the economy. Inflation – A sustained increase in the overall price level of goods and services. Deflation – A sustained decrease in the overall price level of goods and services. Purchasing Power – The value of money in terms of what it can buy. Price Index – A measure that compares the cost of a market basket today to the cost in a base year. Consumer Price Index (CPI) – A measure of the average prices paid by consumers for goods and services. Real Rate of Interest – The nominal interest rate minus the inflation rate. Nominal Rate of Interest – The stated interest rate not adjusted for inflation. Recession – A period when economic activity declines for a sustained time. Depression – An extremely severe and prolonged recession. 7 Unemployment – The number of people 16 or older who are willing and able to work, actively looking for a job, but cannot find one. Labor Force – The total number of employed and unemployed people actively seeking work. Frictional Unemployment – Temporary unemployment while workers search for a new job. Structural Unemployment – Long-term unemployment caused by a mismatch between workers’ skills and available jobs. Cyclical Unemployment – Unemployment caused by a recession or downturn in the economy. Inflation – A sustained increase in the overall price level of goods and services. Deflation – A sustained decrease in the overall price level of goods and services. Purchasing Power – The value of money in terms of what it can buy. Price Index – A measure that compares the cost of a market basket today to the cost in a base year. Consumer Price Index (CPI) – A measure of the average prices paid by consumers for goods and services. Real Rate of Interest – The nominal interest rate minus the inflation rate. Nominal Rate of Interest – The stated interest rate not adjusted for inflation. Recession – A period when economic activity declines for a sustained time. Depression – An extremely severe and prolonged recession

Unemployment – The number of people 16 or older who are willing and able to work, actively looking for a job, but cannot find one.

Labor Force – The total number of employed and unemployed people actively seeking work.

Frictional Unemployment – Temporary unemployment while workers search for a new job.

Structural Unemployment – Long-term unemployment caused by a mismatch between workers’ skills and available jobs.

Cyclical Unemployment – Unemployment caused by a recession or downturn in the economy.

Inflation – A sustained increase in the overall price level of goods and services.

Deflation – A sustained decrease in the overall price level of goods and services.

Purchasing Power – The value of money in terms of what it can buy.

Price Index – A measure that compares the cost of a market basket today to the cost in a base year.

Consumer Price Index (CPI) – A measure of the average prices paid by consumers for goods and services.

Real Rate of Interest – The nominal interest rate minus the inflation rate.

Nominal Rate of Interest – The stated interest rate not adjusted for inflation.

Recession – A period when economic activity declines for a sustained time.

Depression – An extremely severe and prolonged recession.