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17 terms

MACRO CH.6

macroeconomics Business Cycle and Unemployment
STUDY
PLAY
BUSINESS CYCLE
alternating periods of economic growth and contraction which can be measured by changes in real GDP
PEAK
the phase of the business cycle in which real GDP reaches its maximum after rising during a recovery.
RECESSION
a downturn in the business cycle during which real GDP declines and the unemployment rate rises. Also called contraction
TROUGH
the phase of the business cycle in which real GDP reaches its minimum after falling during a recession
RECOVERY
an upturn in the business cycle during which real GDP rises. Also called an expansion
ECONOMIC GROWTH
an expansion in national output measured by the annual percentage increase in a nation's real GDP
LEADING INDICATORS
variables that hang before real GDP changes
COINCIDENT INDICATORS
variables that change at the same time that real GDP changes
LAGGING INDICATORS
variables that change after real GDP changes
UNEMPLOYMENT RATE
the percentage of people in the civilian labor force who are without jobs and are actively seeking jobs
CIVILIAN LABOR FORCE
the number of people 16 yrs of age and older who are employed or who are actively seeking a job excluding armed forces, homemakers, discouraged workers, and other persons not in the labor force
DISCOURAGED WORKER
a person who wants to work, but who has given up searching for work because he or she believes there will be no job offers
FRICTIONAL UNEMPLOYMENT
unemployment caused by the normal search time required by workers with marketable skills who are changing jobs, initially entering the labor force, reentering the labor force, or seasonally unemployed
STRUCTURAL UNEMPLOYMENT
unemployment caused by a mismatch of the skills of workers out of work and the skills required for existing job opportunities
CYCLICAL UNEMPLOYMENT
unemployment caused by the lack of jobs during a recession
FULL EMPLOYMENT
the situation in which an economy operates at an unemployment rate equal to to the sum of the frictional and structural unemployment rates. also called the natural rate of unemployment.
GDP GAP
the difference between actual real GDP and potential or full-employment real GDP.