owners of savings. With an increase in prices the real cost, or purchasing power, the savings provided against a rainy day will decrease. Of course, almost all forms of savings bring percent, but nevertheless the cost of savings will fall if the rate of inflation exceeds an interest rate.
Cyclic unemployment – a difference between unemployment rate at present an industrial cycle and natural unemployment rate. Thus, in the conditions of recession, cyclic unemployment is added to frictional and structural, and in the conditions of expansion its negative value reduces unemployment rate, subtracting cyclic unemployment and frictional and structural.
the American shoemaker who remained without work because of the competition of import production cannot become, for example, a programmer on the computer, without having passed serious retraining, and maybe without having changed a residence.
It is extremely important to understand a difference between monetary, or nominal, the income and the real income. Monetary, or nominal, the income is a quantity of dollars which the person receives in the form of a salary, a rent, percent or profit. The real income is defined by quantity of goods and services which can be bought for the sum of the nominal income. If your nominal income increases faster rates, than price level, your real income will raise. To the contrary, if price level will quicker grow, than your nominal income, your real income will decrease. Measurement of the real income can be expressed approximately the following formula:
False information. Unemployment rate can be overestimated in that case when some unemployed claims that they look for work though it and is not true, and also the shadow economy promotes overestimate of official unemployment rate.
people who gain rather fixed nominal income. The congress entered indexation of social security benefits; social security payments consider a consumer price index to prevent destructive impact of inflation.
According to Shumpeter "innovations can gush a tidal wave and then to recede. The business cycle is reduced to outflow and inflow of innovations and to those consequences which follow from here".
Part-time. In official statistics all occupied part-time enter category of the completely busy. Including them completely busy, the official statistics underestimates unemployment rate.
We come to a conclusion that the set of the innovations appearing during prosperity is just that factor which breaks balance and so changes conditions of industrial life that after that inevitably there comes the period of reorganization of the prices, costs and production.
The theory of the inflation caused by growth of costs explains an increase in prices with such factors which lead to increase in an unit cost. An unit cost is average costs at this output. Such costs can be received, having divided the general costs of resources of quantity of the made production that is:
There is a huge difference in unemployment rates and inflation in the different countries. Unemployment rates differ because the countries have different natural unemployment rates and often are in different headlights of a business cycle. Within the last several years rates of inflation and unemployments in the USA. Were low in comparison with a number of other industrial countries.
Frictional unemployment – the unemployment connected with the short-term period necessary for searches of new work in connection with education, an exit from a maternity leave, moving. With welfare growth frictional unemployment can increase, and its reduction is possible in process of improvement of methods of collection of information about workplaces that, nevertheless, demands increase in costs.