Unemployment, inflation, and long-run growth

5 important questions on Unemployment, inflation, and long-run growth

Explain the europe 2020 strategy:

Europe 2020 puts forward three mutually reinforcing priorities:

–Smart growth: developing an economy based on knowledge and innovation.
–Sustainable growth: promoting a more resource efficient, greener and more competitive economy.
–Inclusive growth: fostering a high-employment economy delivering social and territorial cohesion.    

Its main objective by 2020 is to employ 75% of the persons aged 20-64 years.

What are the 3 main components of the employment rate?

- Demographic groups: Gender, race, age

- States/regions/countries: Presence of industries, workforce

- Discouraged worker effect: People who stop looking for work and are out of the labor force, NEET =>young people not in employment, education, training.

What are the 3 types of unemployment?

- Frictional: normal turnover labor market, short-term

- Structural: resulting from changes in the economy 

- Cyclical: above frictional & structural  

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What are inflation, hyperinflation and deflation?

-Inflation= increase in overall price level
- Hyperinflation= very rapid increase overall price level
- Deflation= decrease in overall price level (extended, consistent)

What are the different inflation types?

- Demand pull inflation (Demand > supply)
- Cost push inflation (increased cost base)
- Monetary inflation (M x V= P x T)
- Anticipated inflation (No effect on income distribution)
- Unanticipated inflation ( Effect on income distribution)

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