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Unformatted text preview: Chapter 12 continued 14: potential outputmax can be produced under normal circumstances 15: Y=actual, Y*= potential- If actually > potential then positive % (boom) and vice versa for recession 18: natural rate at fixed value 19: Arthur Okun head of economic advisors for President Kennedy and Johnson- Know law: 2 to 1 relationship 21: actual data for economy fit Okuns law pretty well- Labor hording: training new workers is costly if workers know job, company more reluctant to let them go so find busy work for them to do but not a lot gets done. The workers are kept around for recovery timethere is productivity in recession because of this busy work- Profits & productivity= cyclically sensitive 23: NBER & book def of recession- Output should fall for two consecutive quarters (GDP fall for 6 months)usually when declare a recession according to the public 26: C= what we buy; I= purchase of firms and construction of new housing (change in business inventorygoods in process but not finished goods); G= military, people in Washington, social...
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This note was uploaded on 08/29/2010 for the course ECON 302 taught by Professor Abrams during the Spring '08 term at University of Delaware.
- Spring '08
- Monetary Policy