Ch 22 Economic Growth, Business Cycle, Employment, Inflation

Ch 22 Economic Growth, Business Cycle, Employment,...

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Unformatted text preview: e aim of teaching is very simple: guide student to think. ECONOMIC ECONOMIC GROWTH, GROWTH, BUSINESS BUSINESS CYCLES, CYCLES, UNEMPLOYMENT, UNEMPLOYMENT, AND INFLATION AND INFLATION Chapter 22 Chapter 22 e aim of teaching is very simple: guide student to think. 22-2 Todays lecture will: Todays lecture will: Explain the difference between the long-run framework and the short-run framework. Summarize some relevant statistics about growth, business cycles, unemployment, and inflation. Discuss four phases of the business cycle. e aim of teaching is very simple: guide student to think. 22-3 Todays lecture will: Todays lecture will: Explain how unemployment is measured and state some microeconomic categories of unemployment. Relate the target rate of unemployment to potential income. Define inflation and distinguish a real concept from a nominal concept. Discuss two important costs of inflation. e aim of teaching is very simple: guide student to think. 22-4 Macroeconomics Macroeconomics Macroeconomics is the study of the economy as a whole. The four central problems are: Growth Business cycles Unemployment Inflation e aim of teaching is very simple: guide student to think. 22-5 Two Frameworks: The Long Two Frameworks: The Long Run and the Short Run Run and the Short Run Issues of growth are considered in a long-run framework, which focuses on supply. Business cycles are generally considered in a short-run framework, which focuses on demand. Inflation and unemployment fall within both frameworks. e aim of teaching is very simple: guide student to think. 22-6 Growth Growth The primary measurement of growth is changes in real gross domestic product ( real GDP ) the market value of final goods and services produced in an economy, stated in the prices of a given year. The U.S. secular growth rate and the per capital real output growth have been 2.5 to 3.5 percent per year. Per capita real output is real GDP divided by the total population. e aim of teaching is very simple: guide student to think. 22-7 Global Experience with Growth Global Experience with Growth Todays per capita growth rates are historically high. Todays trends began in the late 1700s, about the same time markets and democracies took hold. Growth rates rose from 0.9% in 1820-1950 to 1.9% since 1950. African economies have consistently lagged behind. Annual per capita income in Africa is about $1,500, compared to the world average of $6,000. e aim of teaching is very simple: guide student to think....
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Ch 22 Economic Growth, Business Cycle, Employment,...

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