Term
1. Structural Changes
2. Cyclical Unemployment
3. Frictional Unemployment |
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Definition
| What causes unemployment? (3) |
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Term
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Definition
| more people seeking jobs than there are jobs available |
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Term
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Definition
| deviation of employment from its natural rate |
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Term
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Definition
| inbetween jobs; job search; new jobs are being created and destroyed; people entering labor force |
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Term
| Natural Rate of Unemployment |
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Definition
| Frictional + Structured unemployment = |
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Term
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Definition
| Natural [frictional + structural] + Cyclical = |
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Term
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Definition
| the level of unempoyment that occurs when the unemployment rate = the natural rate |
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Term
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Definition
| the total number of workers, both employed and unemployed [under 16, over 65, or discouraged workers are not included] |
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Term
# of Unemployed / Labor force
U / [U+E] |
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Definition
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Term
Labor Force / Working age Population
[U+E] / WAP |
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Definition
| Labor Force Participation Rate |
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Term
| prisoners, insane people, children under 16, people over 65 |
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Definition
| Not in Working Age Population: |
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Term
Unemployment insurance
Unions
Efficiency wages |
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Definition
| Causes of structural unemployment: |
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Term
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Definition
| a government policy that partially protects workers' incomes when they become unemployed |
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Term
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Definition
| wages that are purposefully above minimum wage to increase productivity |
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Term
1. Worker health
2. Worker turnover
3. Worker quality
4. Worker effort |
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Definition
| Efficiency Wages - 4 Reasons: |
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Term
1. Medium of exchange
2. Unit of account
3. Store of value |
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Definition
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Term
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Definition
| what you complete your transactions with; accepted as a means of payment; reduces barter; double coincidence of wants |
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Term
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Definition
| prices are expressed in terms of money; a standard quantity of measurement |
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Term
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Definition
| you can hold wealth in the form of money; inflation has a negative impact on this |
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Term
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Definition
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Term
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Definition
| no intrinsic value; has value because government says so, its backed by something, or people accept it |
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Term
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Definition
| Fiat money value is _______ than its value as a good |
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Term
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Definition
| contains some sort of intrinsic value; ex) gold |
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Term
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Definition
| how quickly something can be turned into cash |
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Term
| Fractional Reserve Banking System |
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Definition
| the bank is required to keep a percentage of its deposits in the bank |
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Term
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Definition
| formula for the money multiplier is given no ER or CD ratio |
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Term
| (C/D +1) / (C/D + RR/D + ER/D) |
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Definition
| formula for the money multiplier if there is a Currency to Deposit ratio of anything other than zero |
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Term
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Definition
| formula for money multiplier when there are ER given and a CD ratio of 0 |
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Term
1. Open Market Operations
2. Change required reserve ratio
3. Change discount rate
4. Pay interest on reserves |
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Definition
| How does the FED change the money supply? |
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Term
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Definition
| the buying and selling of bonds |
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Term
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Definition
| The FED ____ bonds to increase the money supply and lower the interest rate. |
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Term
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Definition
| The FED ____ bonds to decrease the money supply and raise the interest rate. |
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Term
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Definition
| As the FED _____ the RRR, banks can't loan out as much and it contracts [decreases] the Money Supply |
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Term
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Definition
| As the FED ______ the RRR, banks can loan out more cash and it expands [increases] the Money Supply |
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Term
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Definition
| the special interest rate the FED charges for loans |
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Term
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Definition
| As the FED _____ the Discount Rate the banks take out fewer loans and loan out less thus decreasing the Money Supply |
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Term
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Definition
| As the FED _____ the Discount Rate the banks take out more loans and loan out more thus increasing the Money Supply |
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Term
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Definition
| the rate that banks charge eachother for loans |
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Term
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Definition
| In the SR the Money Supply and federal funds rate move in the ___________ direction |
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Term
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Definition
| In the LR the money supply and the federal funds rate move in the ________ direction. |
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