ECO 212 Study Guide - Final Guide: Money Creation, Open Market Operation, Hyperinflation

• School: University of Miami
• Department: Economics
• Course: ECO 212
• Professor: Nicole Nelson

Document Summary

Natural rate of unemployment: the normal rate of unemployment around which the actual unemployment rate fluctuates. Cyclical unemployment: the deviation of unemployment from its natural rate; associated with business cycles (gdp and economy fluctuates over time) Two ways to evaluate unemployment (1) frictional unemployment: occurs when workers spend time searching for jobs that best suit their skills and tastes; this is short-term for most workers. Economy is always changing so some frictional unemployment is inevitable (2) structural unemployment: occurs when there are fewer jobs than workers; usually this is long term; not enough jobs for the amount of workers in work force. Job search: the process of matching workers with appropriate skills. Some government programs dedicated to matching individuals with jobs. Sectorial shifts: changes in the composition of demand across industries or regions of the country (example- cars were built with steel and now they are built with plastic, so the demand for these products shift)