Unit 3 Macroeconomics

ecruhurriedΔιαχείριση

28 Οκτ 2013 (πριν από 3 χρόνια και 9 μήνες)

249 εμφανίσεις

Unit 3
Macroeconomics

Unit Vocabulary


Gross Domestic
Product


Business Cycle


Consumer Price Index


Unemployment Rate


Monetary Policy


Fiscal Policy


Interest Rates


Discount Rate


Reserve Rate


Open Market
Operations


Aggregate Demand


Aggregate Supply


Inflation


Deficit


Real


Nominal


Structural
Unemployment


Cyclical Unemployment


Frictional
Unemployment

How do doctors measure
our health?


Tools to measure the economy:



Gross Domestic Product



total value of all FINAL
goods and services produced WITHIN the United
States


Only final goods counted to avoid double counting


Includes all Consumer goods (C) + Investments (I) +
Government Purchases (G) + Net Exports (Exports


Imports)


CIGNX



Measured usually over 1 year



Real v Nominal: Nominal is GDP in current prices, Real is
GDP adjusted for inflation

Consumer Price Index


Price index that measures the cost of a
particular “basket” or group of goods


Compares the value of the basket in one
time period to a particular base year


Measures price increases or “inflation”



Inflation is an increase in the overall
average of prices in the economy

Unemployment Rate


What does it mean to be
UNEMPLOYED?



What causes unemployment?



How can we fix unemployment?


Unemployment occurs when people want jobs
but can’t find them



People are in the labor force if they are 16


62
and are ACTIVELY SEEKING work



Unemployment rate is the number of people
who are unemployed / the # of people in the
labor force


3 Types of Unemployment


Frictional: people are temporarily out of a job but will be
working again soon


Ex. People who quit 1 job to go to another, seasonal
employees



Structural: people are unemployed because their job
skills are no longer needed


Ex. Employees at a car plant when new technology is brought
in



Cyclical: people who are unemployed due to drops in
the business cycle


Business cycle is the pattern of contractions (recessions) and
expansions (growth) in the economy


Recession is at least 6 months of decline in economic growth

Business Cycle


4 Stages:

Bottoming out &
move into
expansion