Imports
... Both are price indices but they have different market baskets. The CPI includes consumer goods whereas the GDP deflator contains all items that are produced domestically. ...
... Both are price indices but they have different market baskets. The CPI includes consumer goods whereas the GDP deflator contains all items that are produced domestically. ...
Spring 2015 TEST 3 w/ solution
... B) aggregate income is at its potential level. C) there is an inflationary gap. D) there is a recessionary gap. ...
... B) aggregate income is at its potential level. C) there is an inflationary gap. D) there is a recessionary gap. ...
Economic Indicators
... ____8. Which choice best summarizes the powers of the executive branch? a. the executive branch reviews the laws to make sure they follow the constitution b. the executive branch makes the laws and confirms federal appointments c. the executive branch vetoes laws from Congress d. the executive branc ...
... ____8. Which choice best summarizes the powers of the executive branch? a. the executive branch reviews the laws to make sure they follow the constitution b. the executive branch makes the laws and confirms federal appointments c. the executive branch vetoes laws from Congress d. the executive branc ...
Circular Flow
... Reflects imperfect match between employee skills and requirements of available jobs. Cyclical Unemployment Results from business cycle fluctuations. ...
... Reflects imperfect match between employee skills and requirements of available jobs. Cyclical Unemployment Results from business cycle fluctuations. ...
Macroeconomic Conflict and Consensus
... Results of election tend to be tied to economic conditions in the six months prior to the election Why monetary policy is preferred by many economists ...
... Results of election tend to be tied to economic conditions in the six months prior to the election Why monetary policy is preferred by many economists ...
Transcript
... What about the economy in the mid-90s? The unemployment rate varied between 4.5% and 7.5%. This was neither real high nor real low. The rate had been lower than this in the 60s suggesting that the rate could be even lower. Thus, there was reason to believe that there was some unused production capac ...
... What about the economy in the mid-90s? The unemployment rate varied between 4.5% and 7.5%. This was neither real high nor real low. The rate had been lower than this in the 60s suggesting that the rate could be even lower. Thus, there was reason to believe that there was some unused production capac ...
Chapter 2
... 1. Weren’t working but were available for work, 2. Looked for work during the previous 4 weeks OR were waiting to be recalled to a job from which they had been laid off. – The unemployment rate: ...
... 1. Weren’t working but were available for work, 2. Looked for work during the previous 4 weeks OR were waiting to be recalled to a job from which they had been laid off. – The unemployment rate: ...
Presentation to the Money Marketeers of New York University
... though I’d stress that we can’t say precisely to what extent. Turning to inflation: It has been running below the FOMC’s longer-term goal of 2 percent for well over a year now. That goal is based on the PCE price index, which provides a comprehensive measure of prices. There are three key factors ho ...
... though I’d stress that we can’t say precisely to what extent. Turning to inflation: It has been running below the FOMC’s longer-term goal of 2 percent for well over a year now. That goal is based on the PCE price index, which provides a comprehensive measure of prices. There are three key factors ho ...
18 mark F582 - mrshearingeconomics
... Discuss how changes in aggregate demand and aggregate supply may affect output, unemployment and inflation. JUNE 2009 • Discuss the costs, benefits and sustainability of economic growth JUNE 2010 • Discuss the consequences of: – unemployment – inflation JAN 2012 – a deficit or surplus on the current ...
... Discuss how changes in aggregate demand and aggregate supply may affect output, unemployment and inflation. JUNE 2009 • Discuss the costs, benefits and sustainability of economic growth JUNE 2010 • Discuss the consequences of: – unemployment – inflation JAN 2012 – a deficit or surplus on the current ...
Unemployment and Inflation Recession
... who is not working, is available to work, and generally has made specific efforts to find work. z Labour force: The number of people employed plus the number of unemployed. z Not in the labour force: People who are not looking for work, either because they do not want a job or because they have give ...
... who is not working, is available to work, and generally has made specific efforts to find work. z Labour force: The number of people employed plus the number of unemployed. z Not in the labour force: People who are not looking for work, either because they do not want a job or because they have give ...
Fisher Explained
... In the money market, interest rates are measured on the y-axis and the quantity of money is measured on the x-axis. In our example, we will assume that the economy is at point A. At point A, GDP is at the full employment level. Prices are at P* and unemployment is at 5.5 percent (the natural rate). ...
... In the money market, interest rates are measured on the y-axis and the quantity of money is measured on the x-axis. In our example, we will assume that the economy is at point A. At point A, GDP is at the full employment level. Prices are at P* and unemployment is at 5.5 percent (the natural rate). ...
QUESTIONS FOR DISCUSSION
... in the hope that voters’ satisfaction with lower taxes will outweigh their more abstract concern with budget deficits. The government might also try to raise expectations and confidence with "rosy" economic projections. Another thing they could do is to use monetary policy to reduce interest rates a ...
... in the hope that voters’ satisfaction with lower taxes will outweigh their more abstract concern with budget deficits. The government might also try to raise expectations and confidence with "rosy" economic projections. Another thing they could do is to use monetary policy to reduce interest rates a ...
Midterm #3
... Assume that the price level is fixed and there is excess capacity in the economy. When an increase in the money supply lowers the interest rate and increases investment and national income, the higher national income: A. shifts the money demand curve to the left, reinforcing the fall in the interest ...
... Assume that the price level is fixed and there is excess capacity in the economy. When an increase in the money supply lowers the interest rate and increases investment and national income, the higher national income: A. shifts the money demand curve to the left, reinforcing the fall in the interest ...
Back to the drawing board
... We are hoping that the new Centre will do more of this kind of research. The point that I want to make about unemployment is not the fairly obvious one that programmes help reduce the burden of job loss. The Scandinavian countries have been leaders in that endeavour and the results are showing up in ...
... We are hoping that the new Centre will do more of this kind of research. The point that I want to make about unemployment is not the fairly obvious one that programmes help reduce the burden of job loss. The Scandinavian countries have been leaders in that endeavour and the results are showing up in ...
Inflation Notes
... • Between what percentage points is unemployment “normal”? • Why is high unemployment dangerous to our economy? ...
... • Between what percentage points is unemployment “normal”? • Why is high unemployment dangerous to our economy? ...
Economy Update - South East England Councils
... employment, by Local Authority (District/Unitary) B. Total Effect (low-high employment multiplier) % of total employee jobs ...
... employment, by Local Authority (District/Unitary) B. Total Effect (low-high employment multiplier) % of total employee jobs ...
Fina 353-Lecture Slide Week 5
... turnover-from people entering and leaving the labor force, from quitting jobs to find better ones. - It is a permanent and healthy phenomenon in dynamic and growing economy. - Firms and workers spend time searching out what they believe will be the best attainable match, while these unemployed peopl ...
... turnover-from people entering and leaving the labor force, from quitting jobs to find better ones. - It is a permanent and healthy phenomenon in dynamic and growing economy. - Firms and workers spend time searching out what they believe will be the best attainable match, while these unemployed peopl ...
Econ 102 Fall 2004 – Second Midterm
... diminishing returns to labor tells us that as the number of workers employed increases, output will initially increase at an increasing rate and then eventually increase at a decreasing rate (we can see this from the shape of the aggregate production function). As the employment of labor ...
... diminishing returns to labor tells us that as the number of workers employed increases, output will initially increase at an increasing rate and then eventually increase at a decreasing rate (we can see this from the shape of the aggregate production function). As the employment of labor ...
Principles of Economics
... Inflation implies a decrease in the purchasing power of a given level of income - e.g., after inflation, $1 buys less than it did before However, wages often increase as price do - which means that , even during inflationary times, the average purchasing power of workers may not fall - i.e., each $1 ...
... Inflation implies a decrease in the purchasing power of a given level of income - e.g., after inflation, $1 buys less than it did before However, wages often increase as price do - which means that , even during inflationary times, the average purchasing power of workers may not fall - i.e., each $1 ...
Textbook Chapter 4 (pages 43-53)
... Prices are increasing FASTER than the increase in people’s paychecks! Might occur more frequently during a recovery & prosperity period GDP figures do NOT include: Unsold services (child care, meals, auto maintenance, etc.) Value of leisure time Illegal production & trade (underground econ ...
... Prices are increasing FASTER than the increase in people’s paychecks! Might occur more frequently during a recovery & prosperity period GDP figures do NOT include: Unsold services (child care, meals, auto maintenance, etc.) Value of leisure time Illegal production & trade (underground econ ...
HW4 - San Francisco State University
... a. According to Robert Lucas, is policy advice based on “large-scale macroeconometric models” (developed from the Keynesian model discussed in class) valid? b. Why, or why not? c. Give an example of a parameter in the Keynesian model, which is not policyinvariant. d. Give an example of a parameter i ...
... a. According to Robert Lucas, is policy advice based on “large-scale macroeconometric models” (developed from the Keynesian model discussed in class) valid? b. Why, or why not? c. Give an example of a parameter in the Keynesian model, which is not policyinvariant. d. Give an example of a parameter i ...
PPT
... Unemployment and Full Employment “Natural” Unemployment is the unemployment that arises from frictions and structural change when there is no cyclical unemployment. • Natural unemployment is all frictional and structural unemployment. • The natural unemployment rate is natural unemployment as a per ...
... Unemployment and Full Employment “Natural” Unemployment is the unemployment that arises from frictions and structural change when there is no cyclical unemployment. • Natural unemployment is all frictional and structural unemployment. • The natural unemployment rate is natural unemployment as a per ...
Unemployment and Inflation
... • Underemployed workers would like to work more hours or prefer a job that better matches their skills. • Some unemployed hide their status since they are trying to avoid paying income tax. ...
... • Underemployed workers would like to work more hours or prefer a job that better matches their skills. • Some unemployed hide their status since they are trying to avoid paying income tax. ...
Chpt17
... natural or potential GDP increases steadily over time. As it does so, actual real output is sometimes above and sometimes below the natural level. The difference is called the output gap. ...
... natural or potential GDP increases steadily over time. As it does so, actual real output is sometimes above and sometimes below the natural level. The difference is called the output gap. ...
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.