Chapter 5 Terms - goods Question 4 – Structural...

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Jason Murray 10/06/2010 Economics 2301 David Peek Chapter 5 Terms 1. Consumer Price Index – Over a period of time, the CPI measures the increases and decreases in the costs of the goods and services purchased by the public. 2. Inflation – This is an increase in the price of the goods being purchased by the public. 3. Real Income – This is how much money an individual makes after adjusting for inflation. 4. Unemployment Rate – This term refers to an amount in percentage of the civilian labor force that is employed. 5. Full Employment – This term literally refers to an impossible situation where the unemployment rate is 0%. Question 2 – Real income is the nominal income that has been adjusted for changes in the prices of
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Unformatted text preview: goods. Question 4 – Structural unemployment is where the people who are unemployed are unskilled and as a result, are unable to find work. Frictional unemployment is when the individual(s) have the skills to perform the job(s) at hand, but have lost their job due to other circumstances (e.g. downsizing, replacing workers with machines, new business owner fires old staff and hires his own). Question 5 – It would mean that every one in the civilian labor force would be employed. Question 11 – A discouraged worker is not necessarily actively looking for a new job, which does not categorize him as unemployed. An unemployed worker is someone who is actively trying to find work....
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