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Unformatted text preview: 11. Exonomic investment a. Expansionof business enterprice b. Only inclues money spend purchasing newly created capital goods 12. Expectations a. People incest with good expecataions b. Thingking the business will be profitable c. But it is not always 13. Shocks a. Situations in which they where expecting one thing to happen but something else did 14. Demand shocks a. Unexpected changes in demand for goods and services 15. Supply shocks a. Unexpected changes in supply of goods and services 16. Inventory a. Manufacturing firms keep these to deal with unexpected changes in demand b. Store of oputput that has been produced but not yet sold 17. Inflexible prices (sticky) a. Explain how unexpected change in demand lead to the fluctuations in GDP and employment that occurs over the course of the business cycle 18. Flexible princes a. Materials that change in reacting with supply and demand i. oil...
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- Spring '11