5V%5b1%5d.EconomicStabilizationA

5V%5b1%5d.EconomicStabilizationA - Global Economics Econ...

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Part 5: Role of Governments V. Economic Stabilization Part A (Chapter 31) Global Economics Econ 1100
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Short-Run Economic Fluctuations Economic activity fluctuates from year to year. In most years production of goods and services rises. On average over the past 50 years, production in the U.S. economy has grown by about 3 percent per year. In some years normal growth does not occur, causing a recession.
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Short-Run Economic Fluctuations A recession is a period of declining real GDP, falling incomes, and rising unemployment. A depression is a severe recession.
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Three Key Facts About Economic Fluctuations: (1) Economic fluctuations are irregular and unpredictable. Fluctuations in the economy are often called the business cycle .
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Recessions (a) Real GDP Billions of 1992 Dollars 1965 1970 1975 1980 1985 1990 1995 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 $7,000 Real GDP A Look At Short-Run Economic Fluctuations
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Three Key Facts About Economic Fluctuations: (2) Most macroeconomic variables fluctuate together. Most macroeconomic variables that measure some type of income or production fluctuate closely together. Although many macroeconomic variables fluctuate together, they fluctuate by different amounts.
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Recessions (b) Investment Spending Billions of 1992 Dollars 300 400 500 600 700 800 900 1,000 $1,100 Investment spending 1965 1970 1975 1980 1985 1990 1995 A Look At Short-Run Economic Fluctuations
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Fluctuations: (3) As output falls, unemployment rises. Changes in real GDP are inversely related to changes in the unemployment rate. During times of recession, unemployment rises
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5V%5b1%5d.EconomicStabilizationA - Global Economics Econ...

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