Term
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Definition
| correlated with low economic because the economy fails to create more jobs |
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Term
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Definition
16+yrs old
Not institutionalized (prison, disability)
Has job |
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Term
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Definition
16+yrs old
Not institutionalized
Not in military
No job
Looking for work |
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Term
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Definition
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Term
| Adults non-institutionalized civilians= |
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Definition
| labor force + adults not in the labor force |
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Term
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Definition
| adults non-institutionalized civilians + children + military + institutionalized |
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Term
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Definition
| (unemployed/labor force) x 100 |
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Term
| Labor force participation rate= |
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Definition
| (labor force/adult-not institutionalized civilian population) x 100 |
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Term
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Definition
| short-term unemployment caused by difficulties of matching employee to employer (scarcity of information is the cause) |
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Term
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Definition
| long-term unemployment caused by "large shocks" that take a long time for the economy to restructure |
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Term
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Definition
| inflation and Unemployment |
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Term
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Definition
| an increase in the price level, an increase in the average level of prices |
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Term
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Definition
| a number that compares the price level in one period relative to prices in some base year |
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Term
| Consumer Price Index (CPI) |
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Definition
| average price of goods bought by a typical consumer |
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Term
| Producer Price Index (PPI) |
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Definition
| average price received by producers |
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Term
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Definition
| average price of all final goods and services (that are included in GDP) |
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Term
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Definition
| cost of basket in that month/cost of basket in base month x 100 |
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Term
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Definition
| Pt-Pt1/Pt1 x 100 (where P is the price level and t is that year) |
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Term
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Definition
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Term
| Quantity of Money Theorem (QTM) |
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Definition
| Mv=Py, M=money, v=velocity, P=price, y=GDP |
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Term
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Definition
| the average number of times that a dollar is spent on goods and services in a year |
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Term
| Factors that determine labor force participation rate |
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Definition
increase in female workers
move from manufacturing to service economy |
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Term
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Definition
| producer doesn't know if the price of a product is increasing because of increased demand or inflation |
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Term
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Definition
| people mistake changes in nominal wages for changes in real wages |
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Term
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Definition
nominal interest rate - inflation
i - pi |
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Term
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Definition
| difference between interest rate and inflation |
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Term
| Theory of Comparative Advantage |
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Definition
| total production of 2 countries is greatest if: they produce what they have comparative advantage in, and import the other goods they want |
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Term
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Definition
| value of total consumption/number of units of labor |
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Term
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Definition
1. wasted resources
2. deadweight loss |
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Term
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Definition
| increases production but resources drawn away from more productive uses |
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Term
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Definition
| less is consumed, lower gains from trade |
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Term
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Definition
| small number of producers, large number of consumers |
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Term
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Definition
| yearly summary of all economic transactions between residents of one country and residents of the rest of the world |
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Term
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Definition
Balance of trade
Net income held abroad (profits, dividends, interest)
net transfer payment (foreign aid) |
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Term
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Definition
| Net exports (NX)=exports-imports |
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Term
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Definition
| value of a countries exports is greater then imports |
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Term
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Definition
| TB + NIKA (net income of capital held abroad) + NTP (net transfer payment) |
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Term
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Definition
| measures changes in foreign ownership of domestic assets, physical or financial |
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Term
| foreign direct investment (FDI) |
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Definition
| business plants or other specific tangible operations in the US |
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Term
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Definition
| purchase of US stocks, bonds, or other asset claims |
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Term
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Definition
| movements of bank deposits from another country to the US |
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Term
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Definition
| when the inflow of foreign capital is greater than the outflow of capital to other nations |
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Term
| KA (capital account balance)= |
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Definition
| foreigners buying US assets - US citizens buying foreign assets |
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Term
| Official Reserve Account (ORA) |
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Definition
| includes US government holdings of: foreign currency, gold reserve, international monetary fund claims-special drawings rights (SDRs) |
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