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Measuring the Econo21 - When inflation and unemployment...

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Measuring the Economy Terms Price of Labor - The wage paid to workers. Production Capability - The production level of an economy when all of the productive factors, including labor, are used at their normal rate. In terms of unemployment, this corresponds to a 6% unemployment rate. Purchasing Power - The amount of goods and services that a unit of currency can buy. Real GDP - The total value of all goods and services produced in an economy valued at constant dollars, or adjusted for inflation. Real Value - The value of something at constant dollars, or adjusted for inflation. Shoeleather Cost of Inflation - Costs of expected inflation caused by people having to make more trips to the bank to make withdrawals because they do not want to keep cash on hand. Stagflation
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Unformatted text preview: - When inflation and unemployment both increase. This phenomenon seems to negate the general applicability of the Phillips Curve. Standard of Living - The level of economic well-being that an individual enjoys. Structural Unemployment - Unemployment due to a mismatch between workers' skills and firms' needs. Substitute - An item that is purchased in lieu of a more expensive or less desirable item. Total Labor Force - The sum of employed workers and unemployed job searchers. Unemployed - Describes individuals who are not currently working but are currently searching for a job. Unexpected Inflation - Inflation that economists and consumers do not expect. Value of a Dollar - The purchasing power of a dollar. Wage - The amount of money paid to a worker. Formulae...
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