Questions and Answers
Which of the following are types of unemployment? (Select all that apply)
What is the natural rate of unemployment?
Structural + Frictional
What is the formula for the unemployment rate?
(Labor force - Employed) / Labor force x 100
What is the labor force participation rate?
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What is the CPI formula?
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What is the inflation rate?
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How is GDP calculated?
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What are the three multipliers? (Select all that apply)
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What is inflation?
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What are the parts of a business cycle? (Select all that apply)
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Study Notes
Types of Unemployment
- Cyclical Unemployment: Arises from economic downturns and is linked to the business cycle.
- Frictional Unemployment: Occurs when individuals are temporarily between jobs.
- Structural Unemployment: Results from advancements in technology or changes in the economy that make certain skills obsolete.
Natural Rate of Unemployment
- Comprises both structural and frictional unemployment, reflecting the minimum level of unemployment in a healthy economy.
Unemployment Rate Formula
- Calculated by subtracting the number of employed from the total labor force, then dividing by the labor force and multiplying by 100 to express it as a percentage.
Labor Force Participation Rate
- Represents the ratio of the labor force to the total population, indicating the active engagement of a population in the workforce.
Consumer Price Index (CPI) Formula
- Calculated as the base cost divided by the CPI and then multiplied by 100 to determine price level changes.
Inflation Rate
- Determined by calculating the difference between the previous CPI and the current CPI, divided by the previous CPI to assess price level changes over time.
Gross Domestic Product (GDP)
- Expressed as GDP = Y = AE, representing the total economic output of a country.
Types of Multipliers
- Tax Multiplier: Measures the impact of tax changes on overall economic activity.
- Government Spending Multiplier: Reflects how government expenditure influences national income.
- Consumer Spending Multiplier: Indicates the effect of consumer spending on economic output.
- Balanced Budget Multiplier: Illustrates the economic impact resulting from simultaneous changes in government spending and taxation.
Definition of Inflation
- Refers to the persistent rise in general price levels in an economy, leading to a decrease in the purchasing power of money.
Components of a Business Cycle
- Peaks: Points where the economy is at its maximum output.
- Troughs: The lowest points in the economy, often preceding a recovery.
- Expansion: A phase where the economy grows, marked by increased production and jobs.
- Recession: A period of economic decline characterized by reduced spending and output.
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Description
Explore the three main types of unemployment through these flashcards. Learn about cyclical, frictional, and structural unemployment, as well as related concepts like the natural rate of unemployment and labor force participation rates. Perfect for students studying economics and labor market concepts.
