ECN 204 Study Guide - Final Guide: Uric Acid, Reserve Requirement, Relative Price
Document Summary
Unemployment rate (u-rate): % of the labour force that is unemployed. U-rate = 100 x # of unemployment/labour force. Labour force participation rate: % of the adult population that is in the labour force labour force population = 100 x labour force/adult population. = fraction of deposits that banks hold as reserves. = total reserves as a percentage of total deposits. 1/p is the value of measured in goods. Relative price: is the price of one goods relative to (divided by) another. Relative prices are measured in physical units, so they are real variables. Example: price of a cd: /cd, price of cheese pizza: /pizza. Relative price of cds in terms of pizza. Price of cd/price of pizza = / = 1. 5 pizza"s per cd. An important relative price is the real wage: W = nominal wage = price of labour. P = price level = price of goods and services (g&s)
