REVIEW SLIDES--Chs 6-18_2014_Colander-9e(1) (1)

REVIEW SLIDES--Chs 6-18_2014_Colander-9e(1) (1) - .

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Note to Students: In addition to the chapter-by- chapter textbook slides already in the Course Docs folder, here are a few others that may prove useful in reviewing some of what you have been learning in class. Of course, they are in no way a substitute for carefully studying all the required readings and the Study Guide . See the course syllabus. NOTE: These slides are only for your course studies; they are under no circumstances to be reproduced or distributed. -- Dr. G. DeFreitas ECO 1 REVIEW ECO 1 REVIEW Supplementary Slides: Colander (9e) Supplementary Slides: Colander (9e) chs. 6, 7 & 17-18 chs. 6, 7 & 17-18
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ECONOMIC GROWTH, ECONOMIC GROWTH, BUSINESS CYCLES, & BUSINESS CYCLES, & STAGNATION STAGNATION Chapter 6 Chapter 6
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CHAPTER 6 CHAPTER 6 Economic Growth, Business Cycles, Economic Growth, Business Cycles, & Stagnation & Stagnation Objectives: After this Chapter, You Should Be Able To Objectives: After this Chapter, You Should Be Able To Explain the difference between the long-run framework and the short-run framework. Summarize some relevant statistics about growth, business cycles, unemployment, and inflation Describe 4 phases of the business cycle. Explain how recessions can lead to structural stagnation Relate the target rate of unemployment to potential income.
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M I C R O E C O N O M I C S M A C R O E C O N O M I C S M O D E R N E C O N O M I C S
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Micro and Macro Micro and Macro Microecon. -- bottom-up approach, studying individual consumer, firm or local market behavior, eg: the pricing policy of firms. households decisions on what to buy. how markets allocate resources among alternative ends. Macro studies economic aggregates: inflation. unemployment. business cycles economic growth.
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Macroeconomics Macroeconomics Macroeconomics is the study of the economy as a whole. The 4 central problems are: GROWTH BUSINESS CYCLES UNEMPLOYMENT INFLATION
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1. Growth 1. Growth The primary measurement of growth is changes in “ real” gross domestic product ( real GDP ) – the market value of final goods and services produced in an economy, stated in the prices of a given year [“inflation adjusted”]. Per capita real output = Real GDP divided by the total Population.
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Economic Growth illustrated by illustrated by Shifts in the PPC Shifts in the PPC Economic Growth: Neutral Technological Change B u t t e r A Guns 0 Economic Growth: Biased Technological Change 0 B Butter Guns C B D C A
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The The Benefits Benefits and and Costs Costs of Growth of Growth BENEFITS COSTS Increased total goods & services available for population; Wider choices for govt. Pollution, Resource exhaustion, Destruction of natural habitats
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2. 2. Business Cycles Business Cycles The business cycle is the upward and downward movement of economic activity that occurs around the growth trend.
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