ch9a - Two important macro issues What explains the...

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slide 0 Two important macro issues What explains the improvement of our standard of living over time, and the great income disparity among nations? What explains business cycles? A long-run issue and a short-run issue. CHAPTER 9 Introduction to Economic Fluctuations
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slide 1 Summary of chapters 8 and 9 Chapters 8 and 9 tackle the first issue. High saving rate leads to high investment, and promotes economic growth. But in the long run, what drives economic growth is technological progress. Human capital is crucial for higher productivity. We will not do these two chapters due to limited time. CHAPTER 9 Introduction to Economic Fluctuations
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slide 2 Economists’ view An economy’s long-run growth and short-run fluctuations have very different causes. The U.S. economy is growing in the long run. But income and jobs fluctuate around the long- run trend. These fluctuations need to be explained with a theory that focuses on the short-run. CHAPTER 9 Introduction to Economic Fluctuations
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slide 3 CHAPTER 9 Introduction to Economic Fluctuations In this chapter, you will learn… facts about the business cycle how the short run differs from the long run an introduction to aggregate demand an introduction to aggregate supply in the short run and long run how the model of aggregate demand and aggregate supply can be used to analyze the short-run and long-run effects of “shocks.”
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slide 4 DEFINITIONS AND FACTS The business cycle
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This note was uploaded on 05/08/2011 for the course ECON 362 taught by Professor Birz during the Fall '08 term at Binghamton University.

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ch9a - Two important macro issues What explains the...

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