(4) Regulating Natural Monopolies
-if natural mono competition will not play role
Local/State Regulatory Commissions set P
-require that P = MC
pg 494 fig 14-7
-if unregulated, will charge PM & produce QM
regulates to charge PE & produce QE
since PE < AT
20.1 Unemployment Rate and Labor Force Participation Rate
-employed
-worked during week before survey
-temporarily away from job (ill, vacation, strike)
-unemployed
-available for work
- actively looked for work during last 4 weeks
-not in the labor force
22.2 What determines Growth speed?
-Econ growth model:
-growth rates in real GDP per capita
-growth: avg worker produce more goods / time
= Labor Productivity
-Labor Productivity depends on quantity of capital / worker & Tech change
-Per-Worker Productio
23.1 Aggregate Expenditure Model
-assumption: Price Level is Constant
(2) Planned investment vs Actual Investment
- Inventories depend on sales of goods
-When in unplanned inventories actual investment > planned investment
-NO unplanned change in Inventor
24.1 Aggreagte demand
(1) AD curve downward sloping?
-assumption: G not affect by price level
24.2 Aggregate Supply
(1) Long Run AS
-in LR, lev of real GDP is determined by # workers, available technology, and
Capital Stock: factories, buildings, machiner
25.1 What is Money
(1) Barter
-shortcoming: requires Double Coincidence of Wants
money specialize & higher productivity
(2) Function of money
1. Medium of exchange
2. Unit of Account
-unit of account: way of measuring value in econ in terms of money
3. St
(1) Goals of Monetary Policy
26.2 Money Market and Feds Choice of Monetary Policy Target
-2 Monetary Policy Targets: MS & IR
(2) Demand For Money
-IR on Treasury bill/ other financial assets O.C of holding money
demand money
(3) Shift in Money Demand C
27 Fiscal Policy
-change in fed tax & gov purchase
-G: only spending for macroecon policy
-military spending / aid for low income ppl NOT INCLUDED
(ex) unemployment insurance payments (recession )
*Discretionary Fiscal Policy: requires gov action
-G inclu
to
*Law of Diminishing Returns:
-adding more variable input (ex. labor) to the same amount of fixed
input (ex. capital), will eventually cause MP of the variable input
decline
(ex) hiring more workers to same quantity of pizza ovens , workers begin to
get
19.1 GDP measures Total Production
-GDP: market value of all final g/s in country for 1 yr
-measured in dollars, NOT Quantities
NO INTERMEDIATE GOOD
ONLY CURRENT(no used)
1, CONSUMPTION
BUYING HOUSE NOT INCLUDED
2. INVESTMENT
-changes in business inventor
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