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

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
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
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

Page1 / 2

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online