Term
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Definition
| the number of people currently employed in the economy, either full time or part time |
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Term
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Definition
| the number of people who are actively looking for work but aren't currently employed |
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Term
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Definition
| equal to the sum of the employment and unemployment |
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Term
| Labor force participation rate |
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Definition
is the percentage of the population aged 16 or older that is in the labor force
labor force
Population age 16 and older |
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Term
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Definition
the percentage of the total number of people in the labor force who are unemployed
number of unemployed workers
labor force |
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Term
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Definition
| non working people who are capable of working but have given up looking for a job given the state of the job market |
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Term
| marginally attached workers |
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Definition
| would like to be employed and have looked for a job in the recent past but are not currently looking for work |
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Term
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Definition
| Number of people who work part time because they cannot find full-time jobs. |
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Term
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Definition
| works who spend time looking for employment are engaged in job search |
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Term
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Definition
| unemployment due to the time workers spend in job search |
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Term
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Definition
| unemployment that results when there are more people seeking jobs in a labor market than there are jobs available at the current wage rate |
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Term
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Definition
| wages that employers set above the equilibrium wage rate as incentive for better employee performance |
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Term
| natural rate of unemployment |
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Definition
| the unemployment rate that arises from the effects of frictional plus structural unemployment |
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Term
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Definition
| the deviation of the actual rate of unemployment from the natural rate |
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Term
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Definition
| the wage rate divided by the price level |
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Term
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Definition
| income divided by the price level |
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Term
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Definition
| the increased costs of transactions caused by inflation |
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Term
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Definition
| the real cost of changing a listed price |
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Term
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Definition
| arise from the way inflation makes money a less reliable unit of measurement |
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Term
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Definition
| the interest rate expressed in dollar terms |
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Term
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Definition
| the nominal interest rate - the rate of inflation |
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Term
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Definition
| the process of bringing the inflation rate down |
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Term
| Classical model of the price level |
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Definition
| the real quantity of money is always at its long-run equilibrium level[image] |
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Term
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Definition
| the reduction in the value of money held by the public caused by inflation |
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Term
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Definition
| the negative relationship between the output gap and cyclical unemployment |
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Term
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Definition
| the negative short-run relationship between the unemployment rate and the inflation rate[image] |
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Term
nonaccelerating inflation rate of unemployment
(NAIRU) |
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Definition
| the unemployment rate at which inflation does not change over time |
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Term
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Definition
| shows the relationship between unemployment and inflation after expectations of inflation have had time to adjust to experience |
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Term
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Definition
| the process of bringing down inflation that is embedded in expectations. |
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Term
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Definition
| the reduction in aggregate demand arising from the increase in the real burden of outstanding debt caused by deflation |
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Term
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Definition
| there is a zero bound on the nominal interest rate: it cannot go below zero |
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Term
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Definition
| a situation in which conventional monetary policy is ineffective because nominal interest rates are up against the zero bound. |
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Term
| Macroeconomic policy activism |
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Definition
| the use of monetary and fiscal policy to smooth out the business cycle |
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Term
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Definition
| asserted that GDP will grow steadily if the money supply grows steadily |
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Term
| Discretionary monetary policy |
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Definition
| the use of changes in the interest rate or the money supply to stabilize the economy |
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Term
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Definition
| a formula that determines the central bank's actions |
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Term
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Definition
| the ratio of nominal GDP to the money supply |
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Term
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Definition
| because inflation is eventually embedded into expectations, to avoid accelerating inflation over time the unemployment rate must be high enough that the actual inflation rate equals the expected inflation rate |
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Term
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Definition
| results when politicians use macroeconomic policy to serve political ends |
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Term
| New classical macroeconomics |
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Definition
| an approach to the business cycle that returns to the classical view that shifts in the aggregate demand curve affect only the aggregate price level, not aggregate ouput |
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Term
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Definition
| the view that individuals and firms make decisions optimally, using all available information |
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Term
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Definition
| market imperfections can lead to price stickiness for the economy as a whole |
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Term
| real business cycle theory |
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Definition
| claims that fluctuations in the rate of growth of total factor productivity cause the business cycle |
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