PP_Slides_Class_22_Monday_April_7

PP_Slides_Class_22_Monday_April_7 - Good Morning! Class 22...

Info iconThis preview shows pages 1–19. Sign up to view the full content.

View Full Document Right Arrow Icon
Good Morning!! Class 22 Monday, April 7
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1. Fiscal policy is subject to each of these lags except the __ lag. a. impact b. money c. recognition d. decision
Background image of page 2
fiscal policy monetary policy sectors impacted: consumption investment government (housing) foreign
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Other considerations 1. national debt is so large and budget deficits are so large that increasing the budget deficit to fight recession is not really possible
Background image of page 4
1. international capital flows reduce the effectiveness of monetary policy example: the Fed decreases the money supply which increases interest rates but capital flows increase which increases the money supply
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
we learned in chapter 2 economic growth is the PPC (production possibilities curve) being pushed out
Background image of page 6
Production Possibilities Curves
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
in chapter 2 we learned that the PPC gets pushed out when: -more labor -more capital -technological increases
Background image of page 8
also in chapter 2 we learned that a nation that concentrates on producing capital goods gets a faster rate of economic growth
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Capital Spending and Economic Growth
Background image of page 10
2. Labor productivity is measured by a. the ratio of capital to labor b. real output per worker hour c. real output per capita d. the ratio of worker hours to real GDP
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Edward Denison studied US 1929 – 1982 economic growth: ½ due to more labor and more capital ½ due to increased productivity (think of productivity as technological increases)
Background image of page 12
productivity = output per unit of input worker productivity = output per hour worked output worker productivity = hours worked
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
What would make productivity increase? -same output, fewer hours worked -more output, same hours worked -more output, fewer hours worked
Background image of page 14
if workers have “better tools”, they can “make more” in the same amount of time problem: lower savings rate leads to lower investment rate
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
if workers are “better trained,” they can “make more” in the same amount of time problem: falling educational standards lead to declining quality of labor
Background image of page 16
other problems: -rising health care costs -restrictions on immigration -increased military and security spending
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
productivity has increased despite the problems because of: -computerization huge increase in computer literacy -globalization foreign competition forces companies to be more efficient
Background image of page 18
Image of page 19
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/28/2008 for the course ECON 202 taught by Professor Amsler during the Spring '08 term at Michigan State University.

Page1 / 70

PP_Slides_Class_22_Monday_April_7 - Good Morning! Class 22...

This preview shows document pages 1 - 19. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online