MacroEcon Lecture Chapter 6

MacroEcon Lecture Chapter 6 - Chapter 6 Business Cycle 3...

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Chapter 6: Business Cycle 3 different Major topics 1 st : Examination of three major microeconomic variables that economists look at to assess the states GDP of the economy Unemployment rate Inflation rate Look at these three variables, one can tell how the economy is doing how government calculates the GDP and unemployment rate 2 nd : Causes of Business Cycle what causes it? Why does the economy go up and down 3 rd : Examination of certain policies 2 institutions: Federal government- applies fiscal policies Central Bank of the US GDP: defined as total monetary value of all the goods and services produced within the borders of the US during a year either by US citizens or by foreign nationals based on quarterly or monthly or annual basis look at production of US (within borders) look at US or foreign national how much wealth we produce every year Selling Price Net value added Farmer $10 $10 Factory $20 $10 Whole sale $30 $10 Retailer $40 $10
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* using capital resources * it would be a mistake on part of government if GDP increased by $10 (like in the above example (10+20+30)))- you “doublecome” * key point to remember: in order to calculate as something part of GDP it must involve something of production of good or service; if no production, then it doesn’t come? Exclusion from GDP
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This note was uploaded on 12/13/2011 for the course ECON 8732 taught by Professor Kitsikopoulos during the Fall '11 term at NYU.

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MacroEcon Lecture Chapter 6 - Chapter 6 Business Cycle 3...

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