Chapter 13

What is inflation?

A general and progressive increase in prices. Dollar value decreases.

What is frictional employment?

Results from the fact that it takes time for workers to find jobs and for employers to find workers.

What is Seasonal employment?

Seasonal unemployment occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules. This includes lifeguards, ski instructors, agricultural workers, landscapers, and construction workers. Life can be very tough for seasonally unemployed.

What is a price index?

Statistical series used to measure changes in price over time.

What is income distribution?

refers to the way in which an economy's income is spread among the members of different social and socio-economic groups

What is workfare?

social programs designed to help welfare recipients find and keep jobs

What is a fixed income?

they get a certain amount of pay and does not ever increase even costs do

What is structural employment?

Structural unemployment occurs when workers' skill levels do not match the jobs that are available. 5 major causes of structural unemployment include development of new technology, discovery of new resources, changes in consumer demand, globalization, and lack of education.

What is poverty rate?

The percent of the population below the poverty line.

What is inflation rate?

The percentage increase in overall price level of goods and services over a given period of time, usually a year.

Who is poor, according to the government?

A state or condition in which a person or community lacks the financial resources and essentials to enjoy a minimum standard of life and well-being that's considered acceptable in society. Poverty status in the United States is assigned to people that do not meet a certain threshold level set by the Department of Health and Human Services.

What are the causes of poverty?

Changing trends in a country's economy, lack of education, high divorce rate which causes feminization of poverty, having a culture of poverty, overpopulation, epidemic diseases such as AIDS and malaria, and environmental problems such as lack of rainfall.

What are the effects of inflation?

Cost-push inflation, hoarding, social unrest and revolts, hyperinflation, allocative efficiency, shoe leather cost, menu cost, and business cycle.

What is cyclical employment?

Cyclical employment is unemployment that results from inadequate aggregate demand during the recession and depression phases of the business cycle.

How is full employment measured?

Full Employment Index is a composite index that takes into account employment and unemployment levels which have an impact on human economic welfare. Adult employment, Youth employment, long term employment, employment to population ratio and job creation rate, the sub-indices of FEI, have an equal impact on economic welfare and security. The 25+ employment rate tells us if human potentials and skills have been utilized effectively.

What is poverty threshold?

Income level below what is needed to support families or households

What are the effects of rising prices?

Inflation

What are the causes of inflation?

Inflation is the devastating condition when prices just keep going up, eating away at your standard of living. There are three main causes: demand-pull, cost-push, and monetary expansion.

What is full employment?

Level of employment where there is no cyclical unemployment.

Why dose full employment does not mean that every worker is employed?

To be fully employed doesn't mean 0% unemployment. Natural rate of unemployment is the number of percent of unemployed people during full employment.