Chapter 6 class - c Modern Economic growth i Output per...

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Chapter 6 1. Long-term economic growth 2. a. Business cycle 3. Real GDP a. Corrects for price changes b. Does not use current year prices 4. Nominal GDP a. Use current prices b. Uses correct year price changes 5. Unemployment 6. Inflation a. Increase in overall level of prices 7. Most important factor in production a. Unemployment 8. Can governments a. Promote economic growth b. Reduce severity of recession 9. Is monetary or fiscal policy more effective at mitigating recession 10. Is there a tradeoff between inflation and employment a. Purchasing power goes down 11. Us Output growth a. 2.7% 12. Us unemployment a. 4.6 if 2007 13. US inflation
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a. 2.7 in 2007 14. Economic Growth a. Standard of living measured by output per person b. No growth in living standards prior to Industrial Revolution
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Unformatted text preview: c. Modern Economic growth i. Output per person rises ii. Not experienced by all countries 15. Saving a. Trade off current for future consumption 16. Investment a. Financial Investment b. Economic investment c. Ecpectations i. Fureute is uncertain ii. Expecataations affect investment iii. Shock Means 1. Demand shocks and flexible prices 2. Sticky Prices a. When price does not change but demand does b. Explain flucturations in GDP c. All prices are flexible in long run i. Firms adjust to unexpected, but permanent changes in demand d. Many prices are sticky in short run i. Consumers prefer stable prices ii. Firsm want to avoid price wars...
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This note was uploaded on 05/09/2011 for the course ECON 102 taught by Professor Ashookshulka during the Spring '11 term at Harrisburg Area Community College.

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Chapter 6 class - c Modern Economic growth i Output per...

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