1-30-07 - When GDP is below 3%, unemployment will increase...

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Macro-Economics Lecture 1/30/07 GDP – Anything productive, productive activities Unemployment – Anyone 16 years or older that isn’t retired that is unemployed and looking for jobs Potential GDP – Assumes that all economic resources are fully employed Okun’s Law: DY/Y = 3.0 – 2.5DU When GDP stays the same, unemployment will remain the same When GDP is above 3%, unemployment will decrease
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Unformatted text preview: When GDP is below 3%, unemployment will increase GDP Deflator Measure of inflation for all of the goods When the index rises we have inflation, when the index lowers we have deflation High government spending crowds out investment in the economy 20% of our GDP is government 9% of our GDP is private investment...
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This note was uploaded on 03/08/2009 for the course ECON 20091_ECO taught by Professor Mohammadsafarzadeh during the Spring '09 term at USC.

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