Macroeconomics: Chapter 6

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price level
a measure of the average prices of goods and services in the economy
price index
a measure of the price level
consumer price index (CPI)
the weighted average of prices of a specific set of goods and services purchased by a typical household
base year
The year chosen as a point of reference or basis of comparison for prices in other years; a benchmark year.
a general and progressive increase in prices
real income
nominal income adjusted for price changes
nominal income
the current dollar amount of a person’s income
unemployment rate
the percentage of the civilian work force that is unemployed at any given date
employment rate
percentage of the noninstitutional adult civilian population that is employed
labor force participation rate
percentage of the civilian noninstitutional population that is in the civilian work force
frictional unemployment
unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills
structural unemployment
Unemployment of workers whose skills are not demanded by employers, who lack sufficient skill to obtain employment, or who cannot easily move to locations where jobs are available
natural unemployment
unemployment caused by frictional and structural factors in the economy
cyclical unemployment rate
The difference between the unemployment rate and the natural unemployment rate.
full employment
the level of employment reached when there is no cyclical unemployment, the situation that exists when the official unemployment rate equals the natural unemployment rate
CPI in the base year…
Categories: Macroeconomics