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Unformatted text preview: Econ Notes Recession-Now Job Loss Recovery-More productions with less jobs Recessions in 70's and 80's had higher unemployment & bigger Losses in GDP Consumption expenditures Depreciation of currency adds to inflation Target inflation 2% Opportunity Cost Value of giving up next best thing STAYING IN TEXAS MOVING TO MIAMI Better Weather Less Traffic Beach Higher Real Wage Fishing Less Crime Golfing Bigger Office Better Department (^Units of Satisfaction) Cost ofLiving Adjustment (COL 4%, Inflation 4%) Offset Cost of Inflation Real wage = W/P $10/hr $2/Beer Real Wage=5 Bottles of Beer Policy Monetary Policy Fed Reserve + Interest Rates Lower Interest (Borrow more & spend more) Fiscal Policy (Govt Purchase, Taxes) Food Prices Rising Sharply Lower income family will spend more % of income Corn Prices ^, b/c of congress want corn for ethanol Stiffer immigration, No illegal's to take low wages Freeze (more damaged fruit) ^ Diesel Fuel Prices Milk massively exported to India and China $1=1e Q of milk $1=1e $1.2=1e $1=.833e ...
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