Scribd
Upload
72 views3 pages

Macro Chap 20 & 21

The document discusses macroeconomic concepts related to unemployment, inflation, economic growth, and business cycles. It defines key terms like the unemployment rate, inflation rate, consumer price index, producer price index, and business cycle. It also outlines factors that influence long-run economic growth like technology, capital accumulation, and human capital. The business cycle is described as alternating periods of economic expansion and recession.

Uploaded by

vivianguo23
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
72 views3 pages

Macro Chap 20 & 21

The document discusses macroeconomic concepts related to unemployment, inflation, economic growth, and business cycles. It defines key terms like the unemployment rate, inflation rate, consumer price index, producer price index, and business cycle. It also outlines factors that influence long-run economic growth like technology, capital accumulation, and human capital. The business cycle is described as alternating periods of economic expansion and recession.

Uploaded by

vivianguo23
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

MACROECONOMICS CHAP 20 Unemployment rate = #U/#LF Frictional unemployment = short-term unemployment that arises from the process of matching

workers with jobs Structural unemployment = unemployment that arises from a persistent mismatch between the skills and attributes of workers and the requirements of jobs Cyclical unemployment = unemployment caused by a business cycle recession Natural rate of unemployment = the normal rate of unemployment, consisting of frictional unemployment plus structural unemployment Inflation rate = the percentage increase in the price level from one year to the next Consumer price index (CPI) = an average of the prices of the goods and services purchased by the typical urban family of four CPI = (Expenditures in the current year / Expenditures in the base year) x 100 Four biases that cause changes in CPI to overstate true inflation rate by 0.5 percentage point to 1 percentage point: Substitution bias Increase in quality bias New product bias Outlet bias

Producer price index (PPI) = an average of the prices received by producers of goods and services at all stages of the production process MACROECONOMICS CHAP 21 Business cycle = alternating periods of economic expansion and economic recession Long-run economic growth = the process by which rising productivity increases the average standard of living (real GDP per capita)

Long-run economic growth due to: Technology (patents, R&D) Capital accumulation Human capital (education)

Increases in real GDP per capita depend on increases in labor productivity. Labor productivity = the quantity of goods and services that can be produced by one worker or by one hour of worked Capital = manufactured goods that are used to produce other goods and services Technology = processes a firm uses to turn inputs into outputs of goods and services Potential GDP = the level of real GDP attained when all firms are producing at capacity To calculate how many years it will take real GDP per capita to double: Rule of 70 Number of years to double = 70/Growth rate Business cycle

Real GDP increase smoothly in an expansion to a business cycle peak and then decreases smoothly in a recession to a business cycle trough, which is followed by another expansion. A recession = losing 2 quarters of output Y = C + I + G + NX Closed economy: Y = C + I + G Sprivate = Y + TR C T Spublic = T G TR S = Sprivate + Spublic

S=YCG S=I In the case of a budget deficit, T < G + TR (public saving is negative)

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy