ECON 2133 Lecture Notes - Lecture 3: Fisher Equation, Market Basket, Nominal Interest Rate
Document Summary
Real gdp- gdp expressed in constant prices; inflation adjusted to measure of economic output; only measured constant price value of output; + 2. 5-3% annually. * real gdp is the key as only output of goods and services are measured! Unemployment- is those in the job force and lost job and/or are actively seeking a job. Unemployment rate- the percentage of the labor force out of work. Labor force- is all civilians 16 and older and non-institutionalized who are working or actively seeking work (no look-y, no count-y!) * unemployment changes for two reasons: (1) net job gains/loses (people constantly lose and get jobs), (2) household labor force participation decisions. Types of unemployment: frictional unemployment- friction caused by the matching process between potential employer and employee; also called (cid:498)search unemployment(cid:499) because it is the period of time when the employee is looking for a job. Consumer price index- measures (cid:498)cost of living(cid:499) for the average representative.
