sample test one
... increased from 5.6 percent to 8.7 percent. During the same time the rate of growth in real gross domestic product has become negative. From this information we might conclude that A) inflation is probably rampant in this economy. B) a recession is occurring in this economy. C) an expansionary phase ...
... increased from 5.6 percent to 8.7 percent. During the same time the rate of growth in real gross domestic product has become negative. From this information we might conclude that A) inflation is probably rampant in this economy. B) a recession is occurring in this economy. C) an expansionary phase ...
Chapter 21 - Economic Fluctuations
... • Cannot explain facts of short-run economic fluctuations with a model in which the labor market always clears – Classical model assumes market always clears ...
... • Cannot explain facts of short-run economic fluctuations with a model in which the labor market always clears – Classical model assumes market always clears ...
Monetary Policy - Effingham County Schools
... a person expressing the intent to borrow money from the bank ...
... a person expressing the intent to borrow money from the bank ...
Chapter 16
... • Involuntary part-time workers counted as if full-time • Discouraged workers are not counted as unemployed ...
... • Involuntary part-time workers counted as if full-time • Discouraged workers are not counted as unemployed ...
Power Point - The University of Chicago Booth School of Business
... “The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measu ...
... “The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measu ...
Instructor`s class notes
... Wage increases will be passed along through prices, so inflation is high when unemployment is low Downward-sloping Phillips curve results Problem with simple theory is that it fails to distinguish between real and nominal wages Tight labor market should increase real wages For real wages to rise ...
... Wage increases will be passed along through prices, so inflation is high when unemployment is low Downward-sloping Phillips curve results Problem with simple theory is that it fails to distinguish between real and nominal wages Tight labor market should increase real wages For real wages to rise ...
Document
... – Tightness of the labor market – Expected price level – Wage push – Change in production costs unrelated to wages (supply shocks) ...
... – Tightness of the labor market – Expected price level – Wage push – Change in production costs unrelated to wages (supply shocks) ...
12 - Brad DeLong
... During the 1970s monetary policy in the U.S. was overly expansionary. One reason for this was Federal Reserve Chair Arthur Burns’s fear that tighter monetary policy to restrain inflation would generate pressure for Congress to reform or replace the Federal Reserve. A second reason--perhaps: economis ...
... During the 1970s monetary policy in the U.S. was overly expansionary. One reason for this was Federal Reserve Chair Arthur Burns’s fear that tighter monetary policy to restrain inflation would generate pressure for Congress to reform or replace the Federal Reserve. A second reason--perhaps: economis ...
Macroeconomic Indicators
... Was the DaveDollar worth more or less in the second round? What can you deduce from this activity is the impact of price rises on consumers? ...
... Was the DaveDollar worth more or less in the second round? What can you deduce from this activity is the impact of price rises on consumers? ...
The AD-AS Model
... Keynesian Model: Conclusion & Recommendations The Keynesian model of a modern, complex industrial economy suggests that an economy will NOT automatically self-correct when in a recessionary or inflationary gap. Indeed, a long and deep recession with very high unemployment is very possible. Keynesian ...
... Keynesian Model: Conclusion & Recommendations The Keynesian model of a modern, complex industrial economy suggests that an economy will NOT automatically self-correct when in a recessionary or inflationary gap. Indeed, a long and deep recession with very high unemployment is very possible. Keynesian ...
The Relationship between Output and Unemployment with Efficiency Wages
... reflecting the fixed cost of production (assumed to be identical across firms). The increasing returns to scale, implied by falling average cost, therefore gives rise to the incentive for full specialisation from which a one-to-one correspondence between the mass of varieties and firms results. We a ...
... reflecting the fixed cost of production (assumed to be identical across firms). The increasing returns to scale, implied by falling average cost, therefore gives rise to the incentive for full specialisation from which a one-to-one correspondence between the mass of varieties and firms results. We a ...
Stimulus by Spending Cuts: Lessons from 1946
... After the Second World War, unemployment rates, artificially low because of wartime conscription, rose a bit, but remained under 4.5 percent in the first three postwar years —below the long-run average rate of unemployment during the 20th century. Some workers voluntarily withdrew from the labor for ...
... After the Second World War, unemployment rates, artificially low because of wartime conscription, rose a bit, but remained under 4.5 percent in the first three postwar years —below the long-run average rate of unemployment during the 20th century. Some workers voluntarily withdrew from the labor for ...
Types of Unemployment
... – Frictional – when people change jobs or get laid off (between jobs, left one to take another) – Structural – when the skills of workers do not match the jobs that are available (big change in economy, change in the business, like a merger, or a closure.) – Seasonal – when a period of steady work i ...
... – Frictional – when people change jobs or get laid off (between jobs, left one to take another) – Structural – when the skills of workers do not match the jobs that are available (big change in economy, change in the business, like a merger, or a closure.) – Seasonal – when a period of steady work i ...
II. Measurement of Economic Performance (12
... National Income is all income earned by American supplied resources, whether here or abroad. Compensation of employees: wages, salaries, fringe benefits, salary and supplements, social security, health and pension plans Rents: payments for supplying property resources (adjusted for depreciation ...
... National Income is all income earned by American supplied resources, whether here or abroad. Compensation of employees: wages, salaries, fringe benefits, salary and supplements, social security, health and pension plans Rents: payments for supplying property resources (adjusted for depreciation ...
Economic Fluctuations, Unemployment, and Inflation
... 20-hour weeks without pay on the farm while waiting for a job at a nearby factory. • 5. A travel agent who is laid off because the economy is in a slump and vacation travel is at a minimum. • 6. A plumber who works 5 hours per week for his church (on a paid basis) until he can get a full-time job ...
... 20-hour weeks without pay on the farm while waiting for a job at a nearby factory. • 5. A travel agent who is laid off because the economy is in a slump and vacation travel is at a minimum. • 6. A plumber who works 5 hours per week for his church (on a paid basis) until he can get a full-time job ...
Unemployment
... Duration of Unemployment: The average duration for all employed workers over the past decade is 15.2 weeks. The duration of unemployment increases when the overall activity slows down and falls when it speeds up. Discouraged worker: A person who does not have a job, is available to work, but has ...
... Duration of Unemployment: The average duration for all employed workers over the past decade is 15.2 weeks. The duration of unemployment increases when the overall activity slows down and falls when it speeds up. Discouraged worker: A person who does not have a job, is available to work, but has ...
Krugman`s Chapter 32 PPT
... relationship between unemployment and inflation known as the short-run Phillips curve. This curve is shifted by changes in the expected rate of inflation. The long-run Phillips curve, which shows the relationship between unemployment and inflation once expectations have had time to adjust, is vertic ...
... relationship between unemployment and inflation known as the short-run Phillips curve. This curve is shifted by changes in the expected rate of inflation. The long-run Phillips curve, which shows the relationship between unemployment and inflation once expectations have had time to adjust, is vertic ...
Mankiw Precis
... Inflation expectations. Changes in expectations of inflation are the most important factor shifting the Phillips curve. When expectations of inflation rise, the Phillips curve shifts up: the same unemployment rate is associated with a higher inflation rate. When expectations of inflation fall, the P ...
... Inflation expectations. Changes in expectations of inflation are the most important factor shifting the Phillips curve. When expectations of inflation rise, the Phillips curve shifts up: the same unemployment rate is associated with a higher inflation rate. When expectations of inflation fall, the P ...
7 The Anatomy of Inflation and Unemployment
... Some economists argue that low rates of inflation can be beneficial, as they allow real wages to adjust when necessary, without explicit negotiation. This is controversial, however, and a significant departure from the traditional belief that zero inflation is always best. ...
... Some economists argue that low rates of inflation can be beneficial, as they allow real wages to adjust when necessary, without explicit negotiation. This is controversial, however, and a significant departure from the traditional belief that zero inflation is always best. ...
Ch.7 - MyWeb
... income are likely to be fairly small, since people and institutions will adjust to the anticipated inflation. • Unanticipated inflation may have large effects, depending, among other things, on the amount of indexing to inflation. • real interest rate The difference between the interest rate on a lo ...
... income are likely to be fairly small, since people and institutions will adjust to the anticipated inflation. • Unanticipated inflation may have large effects, depending, among other things, on the amount of indexing to inflation. • real interest rate The difference between the interest rate on a lo ...
Full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment. It is defined by the majority of mainstream economists as being an acceptable level of unemployment somewhere above 0%. The discrepancy from 0% arises due to non-cyclical types of unemployment, such as frictional unemployment (there will always be people who have quit or have lost a seasonal job and are in the process of getting a new job) and structural unemployment (mismatch between worker skills and job requirements). Unemployment above 0% is seen as necessary to control inflation in capitalist economies, to keep inflation from accelerating, i.e., from rising from year to year. This view is based on a theory centering on the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU); in the current era, the majority of mainstream economists mean NAIRU when speaking of ""full"" employment. The NAIRU has also been described by Milton Friedman, among others, as the ""natural"" rate of unemployment. Having many names, it has also been called the structural unemployment rate.The 20th century British economist William Beveridge stated that an unemployment rate of 3% was full employment. Other economists have provided estimates between 2% and 13%, depending on the country, time period, and their political biases. For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s. Recently, economists have emphasized the idea that full employment represents a ""range"" of possible unemployment rates. For example, in 1999, in the United States, the Organisation for Economic Co-operation and Development (OECD) gives an estimate of the ""full-employment unemployment rate"" of 4 to 6.4%. This is the estimated unemployment rate at full employment, plus & minus the standard error of the estimate.The concept of full employment of labor corresponds to the concept of potential output or potential real GDP and the long run aggregate supply (LRAS) curve. In neoclassical macroeconomics, the highest sustainable level of aggregate real GDP or ""potential"" is seen as corresponding to a vertical LRAS curve: any increase in the demand for real GDP can only lead to rising prices in the long run, while any increase in output is temporary.