Macroeconomics midterm 2 review

labor force

Equal to the sum of employment and unemployment

discouraged workers

Nonworking people who are capable of working but have given up looking for a job given the state of the job market

productivity

Output per worker

research and development

Spending to create and implement new technologies

frictional

Voluntary unemployment where one chooses to be unemployment waiting to be employed

efficiency wage

Wages that employers set above the equilibrium wage rate as an incentive for better employee performance

technological progress

an advance in the technical means of the production of goods and services

merit good

A good or service that there is not enough of from the market so the government provides enough

interest rate

A loan is the price, calculated as a percentage of the amount borrowed, that a lender charges a borrower for the use of their savings for one year

unit of account costs

Arise from the way inflation makes money a less reliable unit of measure

physical capital

Consists of human-made resources such as buildings and machines

jobless recovery

In a period in which the real gdp growth rate is positive but the unemployment rate is still rising

real income

Income divided by the price level

total factor productivity

The amount of output that can be achieved with a given amount of factor inputs

cyclical unemployment

The deviation of the actual rate of unemployment from the natural rate due to downturns in the business cycle

human capital

The improvement in labor created by the education and knowledge embodied in the workforce

shoe leather costs

The increased costs of transactions caused by inflation

nominal interest rate

The interest rate expressed in dollar terms

real interest rate

The normal interest rate minus the rate of inflation

underemployed

The number of people who work part time because they cannot find full-time jobs

unemployment rate

The percentage of the total number of people in the labor force who are unemployed

disinflation

The process of bringing the inflation rate down

menu cost

The real cost of changing a listed price

real wage

The wage rate divided by the price level

marginally attached workers

Would like to be employed and have looked for a job in the recent past but are not currently looking for work

infrastructure

roads, power lines, ports, information networks, and other underpinnings for economic activity

labor force participation rate

the percentage of the population aged 16 or older that is in the labor force