Tufte's Dr. ECON 2020 Notes for Southern Utah University
6.A. Two Frameworks: The Long Run and the Short Run 6.B. Growth 6.C. Business Cycles 6.D. Unemployment 6.E. Inflation
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
Chapter 6. Economic Growth, Business Cycles, Unemployment, and Inflation
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6.A. Two Frameworks: The Long Run and the Short Run
What lengths of time typically differentiate the short run from the long run? Is anything assumed to be fixed or constant in the long run? Is anything assumed to be fixed or constant in the short run?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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6.B. Growth
Is the U.S. economy generally growing? Is the U.S. economy growing right now? If the economy as a whole is growing, does that mean our income as individuals is growing too? What about the average income of individuals? What about the median income of individuals? 6.B.1. Global Experiences with Growth 6.B.2. The Benefits and Costs of Growth
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 3
Prepared to accompany Colander's Macroeconomics (5th edition).
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Dr. Tufte's ECON 2020 Notes for Southern Utah University
6.B. Continued
Is growth a long run or a short run phenomenon? Does growth appear to be driven by demand (decisions by buyers of products and services) or supply (decisions by makers of products and services)?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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6.B.1. Global Experiences with Growth
Are current growth rates historically high or low? Are average growth rates the same across different regions? What regions generally have grown the fastest? The slowest? When did economic growth start to be important (for practical purposes)?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 5
6.B.2. The Benefits and Costs of Growth
Do all individuals benefit from growth? On average, do individuals benefit from growth? Does growth help elected officials face tough decisions? Does growth help elected officials make tough decisions? Are there costs to growth?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 6
Prepared to accompany Colander's Macroeconomics (5th edition).
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Dr. Tufte's ECON 2020 Notes for Southern Utah University
6.C. Business Cycles
Does the economy always grow at the same rate? Can the size of the economy actually decline? What does the growth rate have to be for this to happen? 6.C.1. The Phases of the Business Cycle 6.C.2. Why Do Business Cycles Occur? 6.C.3. Leading Indicators
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 7
6.C.1. The Phases of the Business Cycle
What names are given to the points in time when the size of the economy changes direction? Which of those points of time is generally easier to notice, as it is happening? What names are given to the periods of time between those two points? Which of those periods is generally longer?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 8
6.C.1. Continued
What are two names used to describe the economy doing well? What are three names used to describe the economy doing poorly? What is an additional name reserved for describing an extremely bad period for the economy?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 9
Prepared to accompany Colander's Macroeconomics (5th edition).
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Dr. Tufte's ECON 2020 Notes for Southern Utah University
6.C.2. Why Do Business Cycles Occur?
Does expansion and contraction in the economy appear to be driven by demand or supply? Do those changes appear to be random? Do long or strong expansions make the subsequent contractions worse? Are expansions and/or contractions getting longer or shorter? More volatile or less?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 10
6.C.3. Leading Indicators
Can peaks and troughs be predicted? How well? How far in advance? What are some leading indicators?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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6.D. Unemployment
6.D.1. Unemployment as a Social Problem 6.D.2. Unemployment as Government's Problem 6.D.3. Why the Target Rate of Unemployment Changed 6.D.4. Whose Responsibility is Unemployment 6.D.5. How is Unemployment Measured? 6.D.6. Unemployment and Potential Output 6.D.7. Microeconomic Categories of Unemployment
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 12
Prepared to accompany Colander's Macroeconomics (5th edition).
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Dr. Tufte's ECON 2020 Notes for Southern Utah University
6.D. Continued
How do we measure unemployment? Unemployment is divided into four types - can we measure those? What is the least serious type of unemployment? Why? What is the third most serious type of unemployment? Why? What is the second most serious type of unemployment? Why? What is the most serious type of unemployment? Dr. Tufte's ECON 2020 PowerPoint Why? slides to accompany Colander's text.
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6.D.1. Unemployment as a Social Problem
How long has unemployment been a social problem? What does this have to do with cyclical (and perhaps structural) unemployment? How was this related to the change from an agricultural to an industrial society?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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6.D.2. Unemployment as Government's Problem
Why are elected governments sensitive to the amount of unemployment? What about governments that are not elected? What does the text call the desired rate of unemployment? What is another common name for it? What is the approximate desired rate of unemployment? Has this changed? Why isn't it zero?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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Prepared to accompany Colander's (5th Macroeconomics edition).
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Dr. Tufte's ECON 2020 Notes for Southern Utah University
6.D.3. Why the Target Rate of Unemployment Changed
Can you list four reasons why the target rate has changed? Which one has to do with problems with coordination of government policies? Changed in government policies? Changes in society? Changes in the age profile?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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6.D.4. Whose Responsibility is Unemployment
If you think that unemployment is the responsibility of the individual, then this is consistent with what sort of macroeconomist? If you think that unemployment is the responsibility of the government (or society), then this is consistent with what sort of macroeconomist?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 17
6.D.5. How is Unemployment Measured?
Who is counted in the labor force? Who is excluded? How is the labor force divided? How is the unemployment rate formed from that information?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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Prepared to accompany Colander's Macroeconomics (5th edition).
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Dr. Tufte's ECON 2020 Notes for Southern Utah University
6.D.5. Continued
What do we call someone who would like to work, but has given up looking for a job? Are they counted as unemployed? Why? What do we call someone who has to work less than they would like to? Are they counted as employed or unemployed? Why? Why is the unemployment rate a useful measure, even if it could be improved?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 19
6.D.6. Unemployment and Potential Output
Do we always fully employ the labor force? How about machinery? What do we call the level of output we would produce if we (hypothetically) employed all available labor and machines? How did Okun relate the unemployment rate to that level of output?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 20
6.D.7. Microeconomic Categories of Unemployment
Who is more likely to be unemployed, men or women? What age group is most likely to be unemployed? What race is least likely to be unemployed? Are spells of unemployment more likely to be long or short? What is the most likely reason for unemployment?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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Prepared to accompany Colander's Macroeconomics (5th edition).
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Dr. Tufte's ECON 2020 Notes for Southern Utah University
6.E. Inflation
Have nominal prices always risen through time? How long have nominal prices been generally rising? 6.E.1. Measurement of Inflation 6.E.2. Real and Nominal Concepts 6.E.3. Expected and Unexpected Inflation 6.E.4. Costs of Inflation
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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6.E.1. Measurement of Inflation
What do we call a number that measures changes in the price of more than one product? Can you construct one of these from data like Table 6-4 on the test?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text.
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6.E.1. Continued
What are the three most widely used prices indices? Which one is broadest? Which one is most appropriate for you? Which one is released most often? Least often? Which one might help us tell what prices are going to do in the future?
Dr. Tufte's ECON 2020 PowerPoint slides to accompany Colander's text. 24
Prepared to accompany Colander's Macroeconomics (5th edition).
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