Cyclical deficits are caused by changes in the GDP. GDP is the nation’s report card. Nominal GDP is non-adjusted and real is adjusted for inflation. Only final goods and services. The net foreign factor is simply the difference between foreigners here earning money and Americans abroad earning money. Disposable income. When we see personal income we see DPI- disposable personal income. GDP does not account for the black market. Economic growth is very favorable to a fair and balanced living. Scarcity of resources makes growth very popular. Employment act stresses full employment, price stability and economic growth. Productivity is doing something better. The business cycle is akin to the free enterprise system. Unemployment when a person can’t get a job and wants one. Cyclical unemployment deep recession and people aren’t spending. The natural rate of unemployment is frictional plus structural. Another negative of the business cycle is inflation. Demand pull inflation too many dollars chasing too few goods, can last longer. Cost push
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This note was uploaded on 04/12/2008 for the course ECO 1000C taught by Professor Lawrence during the Spring '08 term at St. Johns Duplicate.