Chapter 6 - Unemployment and Inflation

Deflation

________ is the negative inflation or falling prices of goods and services.

CPI

The ________ measures the costs of a typical basket of goods for consumers which includes goods produced in prior years, as well as imported goods.

Adults

________ have substantially lower unemployment rates than teenagers.

Structural unemployment

________** occurs when the economy evolves.

Real Nominal Principle

________:**** What matters to people is the real value of money or income- its purchasing power- not the face value of money or income.

Frictional unemployment

________** is the unemployment that occurs naturally during the normal working of an economy.

CPI

The ________ measures changes in prices of a fixed basket of goods- a collection of items chosen to represent the purchasing pattern of a typical consumer.

CPI

If the ________ overstates increases in the cost of living, the government and employers might be overpaying Social Security recipients and workers for changes in the cost of living.