Create an account
(1) An outward shift in the PRODUCTION POSSIBILITIES CURVE that results from an increase in resource supplies or quality or ain improvement in TECHNOLOGY; (2) an increase of real ouput (GDP) or real output per capita
rule of 70
A method for determining the number of years it will take for some measure to double, given its annual percentage inrease. Ex: To dertermine teh number of years it will take for the price level to double, divide 70 by the annual rate of inflation
A measure of average output or real output per unit of input.For ex, the productivity of labor is determined by dividing real output by hours of work
Recurring increases and decreases in the level of economic activity over periods of eyars; consists of peak, recession, trough, and recovery phases.
Where output and employment "bottom out" at their lowest levels; may be either shrot-lived or quite long
Where output and employment rise toward full employment; as this intensifies, the price level may begin to rise before full employment and full-capacity production return
Consists of people who are able and willing to work; those who are employed and those who are unemployed but activiely seeking work
Employees who have left the labor force because they have not been able to find employment
Caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs
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
full-employment rate of unemployment
The unemployment rate at which there is no cyclical unemployment of the labor force; equal to between 4 and 5 percent in the US because some frictional and structural employment is unavoidable
natural rate of unemployment (NRU)
The full-employment unemployment rate; the unemployment rate orccuring when there is not cyclical unemployment and the economy is achieving its potential output; the unemployment rate at which actual inflation equal expected inflation
The real output (GDP) an economy can produce when it fully employs its available resources
The generalization that any 1-percentage-point rise in the unemployment rate above the full-employment unemployment rate will increase the GDP gap by 2 percent of teh potential output (GDP) of the economy
Increases in price level (inflation) resultng from an excess of demand over output at the existing price level, caused by an increase in aggregate demand
Increases in the price level (inflation) resulting from an incrase in resoruce costs (ex: raw-material prices) and haence in per-unit production costs; inflation caused by reductions in aggregate supply
per-unit production costs
The avertage production cost of a particular level of putput; total input cost divided by units of output
The number of dollars received by an individual or group for its resources during some period of time
The amount of od G and S that can be purchased with nominal income during some period of time; nominal income adjusted for inflation
cost-of-living adjustments (COLAs)
An automatic increase in the income (eages) of workers when inflation occurs guranteed by a collective gargaining contract between firms and workers
real interest rate
The interst rate expressed in dollars of onstant value (adjusted for inflation) and equal to the nominal interest rate less the expected rate of inflation
nominal interest reate
The interst rate expressed in terms of annual amounts currently charged for interst and not adjusted for inflation
Please allow access to your computer’s microphone to use Voice Recording.
Having trouble? Click here for help.
We can’t access your microphone!
Click the icon above to update your browser permissions and try again
Reload the page to try again!Reload
Press Cmd-0 to reset your zoom
Press Ctrl-0 to reset your zoom
It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.
Please upgrade Flash or install Chrome
to use Voice Recording.
For more help, see our troubleshooting page.
Your microphone is muted
For help fixing this issue, see this FAQ.
Star this term
You can study starred terms together