Fluctuations in the general level of economic activity as measured by variables such as the rate of unemployment and changes in Real GDP.

A downturn in economic activity charaterized by declining real GDP and rising unemployment.  Two consecutive quarters in which there is a decline in real GDP.

A prolonged and very severe recession.

The number of people sixteen years of age and over who are either employed or unemployed.  to be classified as unemployed, a person must be looking for a job.

The term used to describe a person not currently empled who is either (1) actively seeking employment or (2) waiting to begin or return to a job.

The numver of people in the civilian labor force sixten and over who are wither employed or actively seeking employment as a percentage of the total civilian population sixteen and over.

The percentage of people in the labor force who are unemployed.  Mathematically, it is equal to the number of people unemployed divided by the number of people in the labor force.

The number of people sixteen and over employed as civilians divided by the total civilian population sixteen and up.  The ratio is a PERCENTAGE

unemployment due to constant changes in the economy that prevent qualified unemployed workers from being immediately matched up existing job opening.  It results from imperfect information and search activities related to suitably matching employees with employers.

Unemployment due to the structural characteristics of the economy that make it difficult for job seeker to find employment and for employers fro hire workers.  Although job openings are available they generally require skills many unemployed workers do not have.

Unemployment due to recessionary business conditions and inadequate labor demand.

The level of employment that results from the efficient use of labor force taking into account the normal (natural) rate of unemployment due to information costs, dynamic changes, and structural conditions of the economy. 

The "normal" unemployment rate due to frictional ad structural conditions in labor markets.  It is the unemployment rate that occurs when the economy is operating at a sustainable rate of output. 

The level of output that can be achieved and sustained in the future, given the size of the labor force, its expected productivity and the natural rate of unemployment consistent with the efficient operation of the labor market.  Actual output can differ from the economy's potential output.

An increase in the general level of prices that was not expected by the most decision makers.

An increase in the general level of prices that was expected by most decision makers.

(1) High and variable inflation reduces investment

(2) Inflation distorts the information delivered by prices

(3) High and variable inflation results in less productive use of resources