| A | B |
|---|
| labor force | all people who are at least 16 years old and are working or actively looking for work |
| intrinsic reward | nonmonetary rewards for working at a particular job |
| derived demand | the demand for workers and other resources follows consumers' demand for the good |
| capital-intensive | dependent on machines to produce goods |
| labor-intensive | producing goods primarily through animal and human power |
| The six factors that affect a worker's job choice are | (1)wages, (2)skills, (3)working conditions, (4)location, (5)intrinsic rewards, (6)market trends |
| Supply and demand affect the price of | labor, or workers' wages |
| labor union | an organization of workers that negotiates with employers for better wages, improved working conditions, and job security |
| 3 Major Reasons for the Decline in Union Membership | (1)employer opposition, (2)changes in employment patterns, (3)negative public opinion |
| Reasons why labor unions developed | (1)shift to capital intensive economy, (2)employers had lots of control and made large profits, (3)workers were paid low wages, (4)workplaces were unsafe and unsanitary, (5)families sent children to work |
| gross domestic product | the most widely used national income account - the total dollar value of all final goods and services produced within a country during one calendar year |
| output-expenditure model (formula for GDP) | Used to compute GDP=(C + I + G + (X-M) |
| price index | a set of statistics that allows economists to compare prices over time |
| How is a price index used? | Used by economists to measure changes in prices over time - years are compared to a base year to see if prices have increased or decreased compared to that base year |
| business cycles | fluctuations, or changes, in economic activity that occur in a market system |
| recession | a decline in real GDP for two or more consecutive quarters - six months or more |
| trough | the point at which demand, production, and employment reach their lowest levels |
| expansion | a period of economic growth |
| depression | prolonged and severe recession |
| Why is economic growth important to U.S.? | (1)It's a U.S. economic goal, (2)it helps maintain a high standard of living, (3)it helps produce adequate domestic resources for the U.S., (4)it helps the U.S. compete in global markets |
| 3 Factors Impacting Productivity Growth? | (1)Available technology, (2)quantity of capital goods available for the workers, (3)education/skill level of the labor force |
| leading indicators | economic variables that anticipate the direction in which the economy is headed |
| coincident indicators | economic variables that provide information about the current status of the economy |
| lagging indicators | economic variables that change months after an economic upturn or downturn has begun |
| underemployed | workers who have jobs beneath their skill level or who want full-time work but are only able to find part-time jobs |
| Three (3) characteristics of being considered employed | (1)Worked for pay or profit one or more hours (2)Worked without pay in a family business 15 or more hours (3)Has a job but did not work because of illness, weather, vacation or labor dispute issues |
| full employment | unemployment rate of 4-5% (employment of about 95 percent of the labor force) |
| cyclical unemployment | results from recessions and economic downtowns - usually thought to be harmful to the economy |
| frictional unemployment | when workers are moving from one job to another - usually considered a normal part of a healthy and changing economoy |
| structural unemployment | occurs as a result of changes in technology or in the way the economy is organized |
| seasonal unemployment | regular fluctuations in jobs usually affected by busy times in the year or holidays or harvest schedules |
| price level | reflects prices throughout the economy at a particular time |
| aggregate supply | the total amount of goods and services produced throughout the economy |
| aggregate demand | the total amount of spending by individuals and businesses throughout the economy` |
| CPI | a measure of the average change over time in the price of a fixed group of products |
| market basket | a sampling of commonly purchased consumer items used to compare prices |
| inflation rate | monthly or annual percentage change in prices |
| demand pull inflation | when aggregate demand increases faster than economy’s production--contributing factors are an increase in the money supply and an increase in use of credit |
| cost push inflation | producers raise prices to cover higher resource costs--contributing factors are supply shocks and wage-price spirals |
| poverty level/poverty threshold | the lowest income (as determined by the government) that a family or household of a certain size or composition needs to maintain a basic standard of living |
| poverty rate | the percentage of individuals or families in the total population or a subset of the population that are living in poverty |
| income gap | the amount of income inequality in the country |
| Factors contributing to the income gap | (1)Changes in households (2)Change in labor market (3)Changes in technology (4) Growth of a global economy |
| Ways government could help narrow the income gap | (1)Increase government programs--Educational resources, Training programs, Assistance for low-income groups (2)Increase taxes for the wealthy (3)Raise the minimum wage (4)Set wage levels – maximums? (5)Limit areas where companies can relocate to (foreign countries) |
| 4 Reasons for Growth of Government | (1)Population Growth (2)Changing Public Attitudes (3)Rising Standard of Living (4)National Emergencies |
| 4 Purposes for Government Regulation | (1)Regulate Businesses (2)Provide Public Goods (3)Promote Economic Well-Being (4)Stabilize the Economy |
| privatization | the handling of government services by private businesses |
| transfer payments | when the government takes money collected from one group of citizens and distributes to—transfers it—to another group of citizens |
| Examples of Federal Regulary Agencies | IRS, EPA, FDIC, FDA |
| 4 Effects of Government Regulation | (1)prices are affected, (2)services are affected, (3)profits are affected and (4)productivity is affected |
| unemployment rate | the most closely watched and highly publicized labor force statistic--the number of people in the civilian labor force who are unemployed |
| perfect competition | market structure where the price is set by the forces of supply and demand |
| The key difference between perfect competition and monopolistic competition is | the products are different rather than identical |
| In a monopolistically competitive market structure, | sellers spend millions of dollars on advertising their product |
| price war | when sellers aggressively undercut each other's prices to gain a bigger share of the market |
| technological monopoly | encouraged by granting copyrights and patents |
| natural monopoly | RPU--has economies of scale |
| worker's wages and salary is determined by | supply and demand |
| Hazardous or occupations in high demand may paid their worker's | higher salaries |
| collective bargaining | The process of management and union representatives meeting to discuss their goals and offer solutions and compromises |
