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4 Unemployment Types
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Seasonal Unemployment
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ECON TEST 3yo
terms
| Question | Answer |
|---|---|
| 4 Unemployment Types | seasonal, frictional, structural, cyclical |
| Seasonal Unemployment | Unemployed for part of the year. Ex: students only for summer jobs, mall santas, etc. |
| Frictional Unemployment | Unemployed during a job search |
| Structural Unemployment | Unemployed because of mismatch between skills needed vs. skills acquired. |
| Cyclical Unemployment | Not enough jobs to go around due to downturns in the business cycle |
| Labor Force | People 16+ who want to work/are working. |
| Full Employment | Lowest rate of unemployment compatible with price stability (between 4% and 6%) |
| Federal Trade Commission Act | An agency made to study industry structures and behaviors to identify anti competitive practices. |
| Market Mechanism | Means by which forces of supply and demand determine prices and quantities of things sold. |
| 4 sources of market failure | public goods, externalities, market power, inequity |
| Aggregate Demand | Total quantity of output demanded at alternative price levels in a given time period |
| Aggregate Supply | Total quantity of output producers are willing and able to supply at alternative prices levels in a given time period |
| Why does AS curve up, why does AD slope down? | AS: More will be supplied if it can be sold at a higher price. Higher profit margins and costs. AD: Real balances effect, foreign trade effect, interest rate effect. (More is demanded as price is lower) |
| Classical | Classical was "Laissez Faire", believed the market would pull it's self out of a bad situation automatically due to flexible prices/wages. Supply will create its own demand. |
| Say's Law | supply creates own demand |
| Keynes | Keynes said government should intervene to achieve macroeconomic goals. Said Great Depression could happen again without intervention. If people demand it, people will supply it. |
| MPC vs. MPS | Marginal Propensity to Consume: How much someone will spend from income. MPC=Change in consumption/change in disposable income. Marginal Propensity to Save: How much someone will save from income. MPS=change in saving/change in disposable income |
| Inflation | Increase in the average level of the prices of goods and services |
| Relative vs. Average Prices | Relative can just be small portion good/services that increase in price (one prices compared to another, relative). Inflation is all prices increase. |
| Fiscal Policy | Use of government taxes and spending to alter macroeconomic outcomes |
| Four main components of AD | AD=Consumpution(C)+Investment(I)+Government Spending(G)+(exports-imports(X-IM)) |
| How government adjusts AD to help with inflation | FISCAL RESTRAINT: Increase taxes/decrease gov spending to slow down economy. FISCAL STIUMLUS: Decrease taxes/increase gov spending to expand economy. |
| Policy Levers | Tax policy, government spending, changes in interest rates, etc. |
Created by:
kellan6
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