Business Cycles
A state of the economy with high unemployment, acute shortages, and excess manufacturing capacity over an extended period of time.
Depression
Inflation in excess of 500 percent per year.
Hyperinflation?
Unemployment attributed to annual changes in weather or holidays.
Seasonal Unemployment
The ability to purchase goods and services
Purchasing Power
What are the two primary phases of the business cycle?
Recession & Growth
Period in which real GDP declines for two consecutive quarters
Recession
A representative selection of goods and services used to compile a price index.
Market Basket?
Workers being between jobs
Frictional unemployment
This typically happens to the inflation rate when unemployment falls to very low levels. Why?
Inflation rises because workers can demand more pay and higher pay translates to higher prices
An assembly line worker in an automobile plant is laid off during a recession. What type of unemployment is this?
Cyclical Unemployment
Turnaround point where GDP stops going down
Trough
Period of slow economic growth coupled with inflation.
Stagflation
Unemployment directly related to swings in the business cycle.
Cyclical unemployment
A term given to the situation where companies are providing less service due to the pandemic (e.g. no shuttle service at Disneyland)
"Skimpflation"
A woman who works 20 hours a week but wants to work more would be considered
Underemployment
LEIs tend to turn down right before the business cycle reaches this point
Peak
Metric used to measure price changes or a representative sample of frequently used items.
Consumer Price Index
Hiring outside firms to perform non-core operations to lower operating costs.
Outsourcing
If a person has money invested at 9 percent and the rate of inflation is 5 percent, how much return are they actually making on their investment?
14 percent, 9 percent, 4 percent, or 1 percent
4 percent
What three letter acronym includes GDP and CPI?
LEI
Signals showing where the economy is headed.
Leading Economic Indicators (LEIs)
Explanation that rising input costs, especially natural resources, energy and organized labor, drive up the prices of products.
Cost-Push Inflation
Non-institutionalized part of the population, aged 16 and over, either working or looking for a job.
Civilian Labor Force or Labor Force
A term given to the situation where companies are providing less products for the same price
"Shrinkflation"
What is calculated if we take the number of unemployed divided by labor force, times 100?
Unemployment Rate