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