Unemployment & Inflation
All 19 Unemployment & Inflation terms in the AP Economics glossary, each with a clear, exam-accurate definition. Tap any term for the full explanation, formula, and related interactive graph.
Cost-push inflation is a rise in the general price level caused by higher production costs, which shift short-run aggregate supply to the left.
Cyclical unemployment is unemployment that occurs due to a decline in economic activity during a recession.
Deflation is a sustained fall in the general price level of an economy, measured as a negative annual percent change in a price index such as the CPI.
Demand-pull inflation is a rise in the general price level caused by an increase in aggregate demand that outpaces what the economy can produce.
Discouraged workers are people who have given up looking for work because they believe no jobs are available for them.
Disinflation is a fall in the rate of inflation while prices are still rising, so the price level keeps increasing but more slowly than before.
Frictional unemployment is short-term unemployment that occurs when people are between jobs or looking for their first job.
Full employment is the level of employment where there is no cyclical unemployment.
Inflation is a sustained rise in the general price level of an economy, measured as the annual percent change in a price index such as the CPI.
Inflation rate is the percentage change in CPI.
The labor force is the total number of people aged 16 and over who are employed or actively seeking employment.
The labor force participation rate is the percentage of the civilian non-institutional population that is in the labor force.
The natural rate of unemployment is the lowest level of unemployment that can be sustained without causing inflation to rise.
Real wages are wages adjusted for inflation, while nominal wages are the actual dollar amount of wages received.
Structural unemployment is long-term unemployment that occurs when workers' skills do not match the jobs available.
The unemployment rate is the percentage of the labor force that is jobless and actively looking for work: unemployed divided by labor force, times 100.
The long-run Phillips curve is vertical at the natural rate of unemployment, showing no permanent trade-off between inflation and unemployment.
The Phillips curve shows the short-run inverse relationship between the inflation rate and the unemployment rate.
The short-run Phillips curve shows the inverse relationship between the inflation rate and the unemployment rate in the short run.