Unit 4 Business Cycle.pdf - The Business Cycle Introduction...

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The Business Cycle: Introduction to MacroeconomicIndicatorsOverviewThe 1930s were markedbyperlods of chronically high unemployment in the United States. After WorldWar II, Congress passed the Employment Act of 1946, which stated that it was the policy and responsibilityof the federal government to use all practical means to promote maximum empl0yment, production, andpurchasing power. The Employment Act of 1946 established three important goals for the economy:1. Full employment exists when most individuals who are willing and able to work at the prevailingwages in the economy are employe& Even under conditions of fifll employment, there wi!! besome temporary unemployment as workers change jobs and as new workers seek their first jobs.,Price stability exists when the average level of prices in the economy is neither increasing nordecreasing. The goal of price stability does not imply that prices of individual items should notchange--only that the average level of prices should not change..Economic growth exists when the economy produces increasing amounts of goods and servicesover the long term. If the increase is greater than the increase in population, the amount of goodsand services available per person will rise, and thus the nation's standard of living will improve.

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