Chapter 9 class - Chapter 9 1 C Ig Cr Xn a Consumption...

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Chapter 9 1. C+ Ig + Cr +Xn a. Consumption + Industry Gross + Consumer something + Government Expenditures 2. The Business cycle a. Peak i. Recession ii. Trough Expansion iii. Peak iv. Recession v. Recovery vi. Expansion vii.Peak viii. Repeat b. Causes i. Shocks and prices stickiness ii. Supply and productivity shocks iii. Monetary shocks iv. Financial bursts and bubbles v. Unexpected political events vi. Common link 1. Unexpected changes in spending c. Unemployment
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i. Twin problems of the business cycle 1. Unemployment 2. Inflation ii. Measures of unemployment 1. Who’s in labor force a. Unemployment Rate = Unemployment/Labor Force x100 iii. Problems with the unemployment rate 1. Part-time employment 2. Discourage workers iv. Types of unemployment 1. Frictional 2. Structural v. Full employment defined 1. No cyclical unemployment vi. Natural rate of unemployment 1. 1980s 6% 2. 2008 4-5% vii.Aging laborforce viii. Temp agencies and the internet ix. New Welfare laws and work requirement x. Prison population has doubled 3. Inflation a. Rase in general level of prices
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b. Consumer price index (CPI) i. Market basket ii.
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