lecture 9.ppt - ECW1102 ECW1102 Introductory Macroeconomics...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
ECW1102 ECW1102 Introductory Macroeconomics Chapter 35 Introductory Macroeconomics Chapter 35
Image of page 1

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

View Full Document Right Arrow Icon
Lecture 9: Government Policy: Inflation and Unemployment Trade-Of Lecture 9: Government Policy: Inflation and Unemployment Trade-Of Learning Objectives: Explain the links between the AD/AS model and the Phillips curve Illustrate and explain the short-run trade-of between inflation and unemployment; Illustrate and explain how exogenous shocks to aggregate supply can alter the inflation unemployment trade-of; (shift of the short run Phillips curve) Discuss why the inflation-unemployment trade-of doesn’t exist in the long run (long run Phillips curve) Explain the costs involved in reducing the rate of inflation Learning Objectives: Explain the links between the AD/AS model and the Phillips curve Illustrate and explain the short-run trade-of between inflation and unemployment; Illustrate and explain how exogenous shocks to aggregate supply can alter the inflation unemployment trade-of; (shift of the short run Phillips curve) Discuss why the inflation-unemployment trade-of doesn’t exist in the long run (long run Phillips curve) Explain the costs involved in reducing the rate of inflation
Image of page 2
This topic is an accumulation of concepts covered so far in the course. You will need to use diagrams and ideas from several of the previous weeks’ work.
Image of page 3

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

View Full Document Right Arrow Icon
From Day 4 - Unemployment From Day 4 - Unemployment Why is unemployment a problem? Can you give some examples of the efects of unemployment on individuals and society? Why is unemployment a problem? Can you give some examples of the efects of unemployment on individuals and society?
Image of page 4
From Day 4 - Problem of Unemployment Economic view: underutilisation of resources limits economic growth remember Y = A, f (L, K, H, N) Social view: ?????? Link between economic and social issues?
Image of page 5

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

View Full Document Right Arrow Icon
From Day 4 - Government Objectives Governments are supposed to act on their citizen’s behalf for the benefit of society and therefore the whole economy. Following Great Depression (1930s), unemployment is recognised as a terrible economic and social problem. More recently, inflation is recognised as a problem requiring government attention. The two main government targets in most countries are price stability (low inflation) and full employment (low unemployment)
Image of page 6
From Day 5 - Inflation From Day 5 - Inflation Costs of inflation: a fall in purchasing power for those on fixed incomes inflation is like a tax on the holders of money causes deadweight loss as people waste scarce resources trying to avoid it. menu costs - the cost of changing prices on items for sale inflation distorts relative prices, and markets are less able to allocate resources to their best use.
Image of page 7

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

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern