Class Notes - 11-5-07

Class Notes - 11-5-07 - Macroeconomics Class Notes 11/5/07...

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Macroeconomics – Class Notes – 11/5/07 Chapter 20 Business Cycle Aggregate Demand Curve (AD Curve) Aggregate Supply Curve (AS Curve) AD/AS model Recession Model Short-Run Economic Fluctuations Economic activity varies Recession: A drop in real GDP for two consecutive quarters Three Key Facts About Economic Fluctuations Economic fluctuations are unpredictable Most Macro Variables Fluctuate Together When the economy is booming, GDP is high and unemployment is at unnaturally low point As Output Falls, Unemployment Rises Economic Fluctuations Leading Economic Indicators (LEI) foreshadow changes: o Stock prices (BEST LEADING ECONOMIC INDICATOR) o Building permits, Not construction itself o Initial unemployment insurance claims Not the total number of claims, but the first time ones If the number of claims is rising (250k, 275k, 300k, 400k) o Money supply growth Tends to rise before economy starts to rise Tends to fall before economy starts to fall
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This note was uploaded on 04/15/2008 for the course ECON 101 taught by Professor Golden during the Fall '07 term at Allegheny.

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Class Notes - 11-5-07 - Macroeconomics Class Notes 11/5/07...

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