Macroeconomics Principles, Applications, and Tools O'Sullivan Sheffrin Perez Eighth Edition
|
|
- Brent Morrison
- 6 years ago
- Views:
Transcription
1 Macroeconomics Principles, Applications, and Tools O'Sullivan Sheffrin Perez Eighth Edition
2 Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: Pearson Education Limited 2014 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6 10 Kirby Street, London EC1N 8TS. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. ISBN 10: ISBN 10: ISBN 13: ISBN 13: British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Printed in the United States of America
3 application 3 THE LINKS BETWEEN SELF-REPORTED HAPPINESS AND GDP APPLYING THE CONCEPTS #3: Do increases in gross domestic product necessarily translate into improvements in the welfare of citizens? Two economists, David Blanchflower of Dartmouth College and Andrew Oswald of Warwick University in the United Kingdom, have systematically analyzed surveys over a nearly 30-year period that ask individuals to describe themselves as happy, pretty happy, or not too happy. The results of their work are provocative. Over the last 30 years, reported levels of happiness have declined slightly in the United States and remained relatively flat in the United Kingdom despite very large increases in per capita income in both countries. Could it be the increased stress of everyday life has taken its toll on our happiness despite the increase in income? At any point in time, however, money does appear to buy happiness. Holding other factors constant, individuals with higher incomes do report higher levels of personal satisfaction. But these other factors are quite important. Unemployment and divorce lead to sharply lower levels of satisfaction. Blanchflower and Oswald calculate that a stable marriage is worth $100,000 per year in terms of equivalent reported satisfaction. Perhaps most interesting are their findings about trends in the relative happiness of different groups in our society. While whites report higher levels of happiness than African Americans, the gap has decreased over the last 30 years, as the happiness of African Americans has risen faster than that of whites. Men s happiness has risen relative to that of women over the last 30 years. Finally, in recent work Blanchflower and Oswald looked at how happiness varies over the life cycle. Controlling for income, education, and other personal factors, they found that in the United States, happiness among men and women reaches a minimum at the ages of 49 and 45, respectively. Since these are also the years in which earnings are usually the highest, it does suggest that work takes its toll on happiness. Related to Exercises 6.2 and 6.9. SOURCE: David Blanchflower and Andrew Oswald, Well-Being Over Time in Britain and the USA, (working paper 7847, National Bureau of Economic Research, January 2000) and Is Well-being U-Shaped over the Life Cycle, (working paper 12935, February 2007). benefits. Macroeconomists may use data based either on the production that occurs in the economy or on its flip side, the income that is generated, depending on whether they are more focused on current production or on current income. 4 A Closer Examination of Nominal and Real GDP We have discussed different ways to measure the production of an economy, looking at both who purchases goods and services and the income it generates. Of all the measures we have discussed, GDP is the one most commonly used both by the public and by economists. Let s take a closer look at it. Measuring Real versus Nominal GDP Output in the economy can increase from one year to the next. And prices can rise from one year to the next. Recall that we defined nominal GDP as GDP measured in current prices, and we defined real GDP as GDP adjusted for price changes. Now we take a closer look at how real GDP is measured in modern economies. Let s start with a simple economy in which there are only two goods cars and computers produced in the years 2011 and The data for this economy the 111
4 prices and quantities produced for each year are shown in Table 4. The production of cars and the production of computers increased, but the production of computers increased more rapidly. The price of cars rose, while the price of computers remained the same. TABLE 4 GDP Data for a Simple Economy Quantity Produced Price Year Cars Computers Cars Computers $10,000 $5, ,000 5,000 Let s first calculate nominal GDP for this economy in each year. Nominal GDP is the total market value of goods and services produced in each year. Using the data in the table, we can see that nominal GDP for the year 2011 is (4 cars * +10,000) + (1 computer * +5,000) = +45,000 Similarly, nominal GDP for the year 2012 is (5 cars * +12,000) + (3 computers * +5,000) = +75,000 Now we ll find real GDP. To compute real GDP, we calculate GDP using constant prices. What prices should we use? For the moment, let s use the prices for the year Because we are using 2011 prices, real GDP and nominal GDP for 2011 are both equal to $45,000. But for 2012, they are different. In 2012, real GDP is (5 cars * +10,000) + (3 computers * +5,000) = +65,000 Note that real GDP for 2012, which is $65,000, is less than nominal GDP for 2012, which is $75,000. The reason real GDP is less than nominal GDP here is that prices of cars rose by $2,000 between 2011 and 2012, and we are measuring GDP using 2011 prices. We can measure real GDP for any other year simply by calculating GDP using constant prices. We now calculate the growth in real GDP for this economy between 2011 and Because real GDP was $45,000 in 2011 and $65,000 in 2012, real GDP grew by $20,000. In percentage terms, this is a $20,000 increase from the initial level of $45,000 or Percentage growth in real GDP = +20, ,000 =.444 which equals 44.4 percent. This percentage is an average of the growth rates for both goods cars and computers. Figure 5 depicts real and nominal GDP for the United States from 1950 to Real GDP is measured in 2005 dollars, so the curves cross in Before 2005, nominal GDP is less than real GDP because prices in earlier years were lower than they were in After 2005, nominal GDP exceeds real GDP because prices in later years were higher than they were in How to Use the GDP Deflator GDP deflator An index that measures how the prices of goods and services included in GDP change over time. We can also use the data in Table 4 to measure the changes in prices for this economy of cars and computers. The basic idea is that the differences between nominal GDP and real GDP for any year arise only because of changes in prices. So by comparing real GDP and nominal GDP, we can measure the changes in prices for the economy. In practice, we do this by creating an index, called the GDP deflator, that measures how prices of goods and services change over time. Because we are calculating real GDP using year 2011 prices, we will set the value of this index equal to 100 in the 112
5 16,000 14,000 12,000 Billions of dollars 10,000 8,000 6,000 Real GDP 4,000 Nominal GDP 2, Year FIGURE 5 U.S. Nominal and Real GDP, This figure plots both real and nominal GDP for the United States in billions of dollars. Real GDP is measured in 2005 dollars. MyEconLab Real-time data year 2011, which we call the base year. To find the value of the GDP deflator for the year 2012 (or other years), we use the following formula: GDP Deflator = Nominal GDP Real GDP * 100 Using this formula, we find that the value of the GDP deflator for 2012 is +75, ,000 * 100 = 1.15 * 100 = 115 Because the value of the GDP deflator is 115 in 2012 and was 100 in the base year of 2011, this means prices rose by 15 percent between the two years: = = 0.15 Note that this 15 percent is a weighted average of the price changes for the two goods cars and computers. Until 1996, the Commerce Department, which produces the GDP figures, used these formulas to calculate real GDP and measure changes in prices. Economists at the department chose a base year and measured real GDP by using the prices in that base year. They also calculated the GDP deflator, just as we did, by taking the ratio of nominal GDP to real GDP. Today, the Commerce Department calculates real GDP and the price index for real GDP using a more complicated method. In our example, we measured real GDP using 2011 prices. But we could have also measured real GDP using prices from If we did, we would have come up with slightly different numbers both for the increase in prices between the two years and for the increase in real GDP. To avoid this problem, the Commerce Department now uses a chain-weighted index, which is a method for calculating price changes that takes an average of price changes using base years from consecutive years (that is, 2011 and 2012 in our example). If you look online or at the data produced by the Commerce Department, you will see real GDP measured in chained dollars and a chain-type price index for GDP. chain-weighted index A method for calculating changes in prices that uses an average of base years from neighboring years. 113
6 5 Fluctuations in GDP recession Commonly defined as six consecutive months of declining real GDP. peak The date at which a recession starts. trough The date at which output stops falling in a recession. expansion The period after a trough in the business cycle during which the economy recovers. As we have discussed, real GDP does not always grow smoothly sometimes it collapses suddenly, and the result is an economic downturn. We call such fluctuations business cycles. Let s look at an example of a business cycle from the late 1980s and early 1990s. Figure 6 plots real GDP for the United States from 1988 to Notice that in mid-1990, real GDP begins to fall. A recession is a period when real GDP falls for six or more consecutive months. Economists talk more in terms of quarters of the year consecutive three-month periods than in terms of months. So they would say that a recession occurs when real GDP falls for two consecutive quarters. The date at which the recession starts that is, when output starts to decline is called the peak. The date at which it ends that is, when output starts to increase again is called the trough. In Figure 6, we see the peak and trough of the recession. After a trough, the economy enters a recovery period, or period of expansion. 13,500 13,400 Peak Real GDP (billions of 2005 dollars) 13,300 13,200 13,100 13,000 12,900 12,800 12,700 Trough Recovery phase 12, Year FIGURE 6 The Recession Recessions can be illustrated by peaks, troughs, and an expansion phase. The date at which the recession starts and output begins to fall is called the peak. The date at which the recession ends and output begins to rise is called the trough. The expansion phase begins after the trough. The recession began in December 2007 and ended in June SOURCE: U.S. Department of Commerce. From World War II through 2010, the United States experienced 11 recessions. Table 5 contains the dates of the peaks and troughs of each recession, the percent decline in real GDP from each peak to each trough, and the length of the recessions in months. The recession from 1973 to 1975, which started as a result of a sharp rise in world oil prices, was very severe. The recession from 2007 to 2009 was perhaps the worst downturn since World War II. In the last three decades, there have been four recessions, three of them starting near the beginning of each of the decades: 1981, 1990, and In the 2001 recession, employment began to fall in March 2001, before the terrorist attack on the United States on September 11, The attack further disrupted economic activity and damaged producer and consumer confidence, and the economy tumbled through a recession. The recession that began in December 2007 followed a sharp decline in 114
7 TABLE 5 Eleven Postwar Recessions Peak Trough Percent Decline in Real GDP Length of Recession (months) November 1948 October July 1953 May August 1957 April April 1960 February December 1969 November November 1973 March January 1980 July July 1981 November July 1990 March March 2001 November December 2007 June SOURCE: National Bureau of Economic Research, Business Cycle Expansions and Contractions, the housing sector and the financial difficulties associated with this decline. It deepened during the financial crisis that hit in September and October of As credit became less available to both businesses and consumers, the effects of the financial crisis began to show up in reduced consumer spending for durable goods such as automobiles and reduced business investment. Throughout the broader sweep of U.S. history, other downturns have occurred 20 of them from 1860 up to World War II. Not all were particularly severe, and in some unemployment hardly changed. However, some economic downturns, such as those in 1893 and 1929, were severe. Although we used the common definition of a recession as a period when real GDP falls for six months, in practice, a committee of economists at the National Bureau of Economics Research (NBER), a private research group in Cambridge, Massachusetts, of primarily academic economists, officially proclaims the beginning and end of recessions in the United States using a broader set of criteria than just GDP. The NBER s formal definition is a significant decline in economic activity, spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. As you can see, it uses a wide variety of indicators to determine whether a recession has occurred and its length. Depression is the common term for a severe recession. In the United States, the Great Depression refers to the years 1929 through 1933, the period when real GDP fell by over 33 percent. This drop in GDP created the most severe disruptions to ordinary economic life in the United States during the twentieth century. Throughout the country and in much of the world, banks closed, businesses failed, and many people lost their jobs and their life savings. Unemployment rose sharply. In 1933, over 25 percent of people who were looking for work failed to find jobs. Although the United States has not experienced a depression since that time, other countries have. In the last 20 years, several Asian countries (for example, Thailand) and Latin American countries (for example, Argentina) suffered severe economic disruptions that were true depressions. depression The common name for a severe recession. 6 GDP as a Measure of Welfare GDP is our best measure of the value of output produced by an economy. As we have seen, we can use GDP and related indicators to measure economic growth within a country. We can also use GDP to compare the value of output across countries as well. Economists use GDP and related measures to determine if an economy has fallen into a recession or has entered into a depression. But while GDP is a very valuable measure of the health of an economy, it is not a perfect measure. 115
Chapter 5. Measuring a Nation s Production and Income. Macroeconomics: Principles, Applications, and Tools NINTH EDITION
Macroeconomics: Principles, Applications, and Tools NINTH EDITION Chapter 5 Measuring a Nation s Production and Income During the recent deep economic downturn, economists, business writers, and politicians
More informationPearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world
Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk Pearson Education Limited 2014
More information1 of 33. Measuring a Nation s Production and Income. 2 of 33
1 of 33 2 of 33 The methods our government uses today to measure our economy, which we will study in this chapter, were developed in the 1930s. P R E P A R E D B Y FERNANDO QUIJANO, YVONN QUIJANO, AND
More informationMacroeconomics Robert J. Gordon Twelfth Edition
Macroeconomics Robert J. Gordon Twelfth Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk
More informationEconomics Today The Macro View Roger LeRoy Miller Seventeenth Edition
Economics Today The Macro View Roger LeRoy Miller Seventeenth Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the
More informationCost-Benefit Analysis Concepts and Practice Boardman Greenberg Vining Weimer Fourth Edition
Cost-Benefit Analysis Concepts and Practice Boardman Greenberg Vining Weimer Fourth Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the
More informationFinancial Management Principles and Applications Titman Keown Martin Twelfth Edition
Financial Management Principles and Applications Titman Keown Martin Twelfth Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world
More informationFundamentals of Futures and Options Markets John C. Hull Eighth Edition
Fundamentals of Futures and Options Markets John C. Hull Eighth Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on
More informationValuation: The Art and Science of Corporate Investment Decisions Sheridan Titman John Martin Second Edition
Valuation: The Art and Science of Corporate Investment Decisions Sheridan Titman John Martin Second Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies
More informationPearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world
Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk Pearson Education Limited 2014
More informationAdvanced Accounting Floyd A. Beams Joseph H. Anthony Bruce Bettinghaus Kenneth Smith Eleventh edition
Advanced Accounting Floyd A. Beams Joseph H. Anthony Bruce Bettinghaus Kenneth Smith Eleventh edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout
More informationConstruction Accounting and Financial Management Steven Peterson Third Edition
Construction Accounting and Financial Management Steven Peterson Third Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit
More informationExploring Microsoft Office Excel 2007 Comprehensive Grauer Scheeren Mulbery Second Edition
Exploring Microsoft Office Excel 2007 Comprehensive Grauer Scheeren Mulbery Second Edition Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the
More informationMeasuring a Nation s Production and Income
Chapter Summary 5 Measuring a Nation s Production and Income In this chapter, we learned how economists and government statisticians measure the income and production for an entire country and what those
More informationHorngren's Financial & Managerial Accounting Nobles Mattison Matsumura Fourth Edition
Horngren's Financial & Managerial Accounting Nobles Mattison Matsumura Fourth Edition Pearson Education imited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world
More information1 of 24. Modern Macroeconomics: From the Short Run to the Long Run. 2 of 24. They could not have differed more sharply on economic theory and policy.
1 of 24 2 of 24 the Long Run They could not have differed more sharply on economic theory and policy. P R E P A R E D B Y FERNANDO QUIJANO, YVONN QUIJANO, AND XIAO XUAN XU 3 of 24 1 A P P L Y I N G T H
More informationThe End of the Business Cycle?
to look at not only how much we save, but also at how that saving is invested and how productive that investment is. Much saving goes ultimately into business investment, where it raises future productivity
More informationPearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world
Pearson Education Limited Edinburgh Gate Harlow Essex CM0 JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk Pearson Education Limited 04 All
More informationMacro CH 29 sample questions
Class: Date: Macro CH 29 sample questions Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The relationship between real GDP and potential GDP over the
More informationThe aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy.
Chapter 32 The aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy. GDP Deflator can be used as a measure of the price level
More informationGross entire; whole Domestic within a country s borders Product good or service
OBJECTIVES Identify National Income and Product Accounts (NIPA). Explain how gross domestic product (GDP) is calculated. Explain the difference between nominal GDP and real GDP. List the main limitations
More informationFundamentals of Futures and Options Markets
GLOBAL EDITION Fundamentals of Futures and Markets EIGHTH EDITION John C. Hull Editor in Chief: Donna Battista Acquisitions Editor: Katie Rowland Editorial Project Manager: Emily Biberger Editorial Assistant:
More informationFull file at
ADDITIONAL QUESTIONS Problems and/or Essay Questions: CHAPTER 2: MEASUREMENT OF MACROECONOMIC VARIABLES 1. What impact do you think that the movement of women from working in the household to working in
More informationInterpreting Real Gross Domestic Product
Printed Page 112 [Notes/Highlighting] Interpreting Real Gross Domestic Product The difference between real GDP and nominal GDP Why real GDP is the appropriate measure of real economic activity Module 11:
More informationCHAPTER 2. A TOUR OF THE BOOK
CHAPTER 2. A TOUR OF THE BOOK I. MOTIVATING QUESTIONS 1. How do economists define output, the unemployment rate, and the inflation rate, and why do economists care about these variables? Output and the
More informationPrinciples of Macroeconomics. Twelfth Edition. Chapter 13. The Labor Market in the Macroeconomy. Copyright 2017 Pearson Education, Inc.
Principles of Macroeconomics Twelfth Edition Chapter 13 The Labor Market in the Macroeconomy Copyright 2017 Pearson Education, Inc. 13-1 Copyright Copyright 2017 Pearson Education, Inc. 13-2 Chapter Outline
More informationBritish Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library
Editorial Director: Sally Yagan Editor in Chief: Donna Battista Director Editorial Services: Ashley Santora Editorial Project Manager: Karen Kirincich Editorial Assistant: Jane Avery Editorial Assistant:
More informationFIRST LOOK AT MACROECONOMICS*
Chapter 4 A FIRST LOOK AT MACROECONOMICS* Key Concepts Origins and Issues of Macroeconomics Modern macroeconomics began during the Great Depression, 1929 1939. The Great Depression was a decade of high
More informationCHAPTER 2: MEASUREMENT OF MACROECONOMIC VARIABLES
Additional Questions Problems and/or essay questions: CHAPTER 2: MEASUREMENT OF MACROECONOMIC VARIABLES 1. What impact do you think that the movement of women from working in the household to working in
More information3. The phase of the business cycle in which real GDP is at a minimum is called: A. the peak. B. a recession. C. the trough. D. the underside.
1. Most economists agree that the immediate determinant of the volume of output and employment is the: A. composition of consumer spending. B. ratio of public goods to private goods production. C. level
More informationEconomic Forecast for 2009
Economic Forecast for 2009 by David M. Mitchell Director Bureau of Economic Research College of Humanities and Public Affairs Missouri State University 2009 Economic Forecast National Economic Conditions
More informationCurrent Economic Conditions and Selected Forecasts
Order Code RL30329 Current Economic Conditions and Selected Forecasts Updated May 20, 2008 Gail E. Makinen Economic Policy Consultant Government and Finance Division Current Economic Conditions and Selected
More informationThe NBER s Business-Cycle Dating Procedure
The NBER s Business-Cycle Dating Procedure Business Cycle Dating Committee, National Bureau of Economic Research Robert Hall, Chair Martin Feldstein, President, NBER Jeffrey Frankel Robert Gordon Christina
More informationBriefing Paper. Business Week Restates the Nineties. By Dean Baker. April 22, 2002
cepr Center for Economic and Policy Research Briefing Paper Business Week Restates the Nineties By Dean Baker April 22, 2002 Center for Economic and Policy Research 1611 Connecticut Avenue NW, Suite 400
More informationTo our spouses and children, and to all our students, past and present.
To our spouses and children, and to all our students, past and present. Editor-in-Chief: Donna Battista Acquisitions Editor: Ellen Geary Publisher, Global Edition: Laura Dent Director of Editorial Services:
More informationA FIRST LOOK AT* MACROECONOMICS*
C h a p t e r 4 A FIRST LOOK AT* MACROECONOMICS* Chapter Key Ideas Outline What Will Your World Be Like? A. What will happen to economic growth, unemployment, inflation, the government budget deficit,
More informationThe consequences for communities of rising unemployment David Blanchflower
The consequences for communities of rising unemployment David Blanchflower Employment peaked in April 2008; since then we have lost 540,000 jobs. ILO unemployment was also at its low point in April 2008
More informationUNIVERSITY OF CALIFORNIA Economics 134 DEPARTMENT OF ECONOMICS Spring 2018 Professor David Romer
UNIVERSITY OF CALIFORNIA Economics 134 DEPARTMENT OF ECONOMICS Spring 2018 Professor David Romer LECTURE 3 POSTWAR FLUCTUATIONS AND THE GREAT RECESSION JANUARY 24, 2018 I. CHANGES IN MACROECONOMIC VOLATILITY
More informationChapter 4: A First Look at Macroeconomics
Chapter 4: A First Look at Macroeconomics Principles of Macroeconomics I. Economics as a Social Science A. Economics is the social science that studies the choices that individuals, businesses, governments,
More informationTHE U.S. ECONOMY IN 1986
of women in the labor force. Over the past decade, women have accounted for 62 percent of total labor force growth. Increasing labor force participation of women has not led to large increases in unemployment
More informationPart 1 Academic Reading 1
Contents Introduction How to Use This Book v Part 1 Academic Reading 1 Unit 1 About the Academic Reading Test 1 Unit 2 The Skills You Need 7 Unit 3 Multiple-choice Questions 14 Unit 4 True/False/Not Given
More informationResearch & Policy Brief Number 4 December 2009
Institute for Research on Labor and Employment Research & Policy Brief Number 4 December 2009 California Crisis: A Portrait of Unemployed Workers By Lauren D. Appelbaum, Ph.D. Research Director The United
More informationEconomic Growth, Business Cycles, Unemployment, and Inflation
CHAPTER 24 Economic Growth, Business Cycles, Unemployment, and Inflation Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.
More informationchapter: Aggregate Demand and Aggregate Supply 10(1 st ) or 12(2 nd ) ECON Feb. 1, 3, 5 1of Worth Publishers
chapter: 10(1 st ) or 12(2 nd ) >> Aggregate Demand and Aggregate Supply ECON 2020-010 Feb. 1, 3, 5 2009 Worth Publishers 1of 58 Opening Example Who is the chairman of the Federal Reserve? Federal reserve:
More informationThe Goals of Macroeconomic Policy
The Goals of Macroeconomic Policy Dr. Ashraf Samir Website: ashraffeps.yolasite.com Contents Introduction I) The Goal of Economic Growth II) The Goal of Low Unemployment III) The Goal of Low Inflation
More informationAn Introduction to Programming Using Python. David I. Schneider
Global edition An Introduction to Programming Using Python David I. Schneider Vice President and Editorial Director, ECS: Marcia J. Horton Executive Editor: Tracy Johnson Assistant Acquisitions Editor,
More informationTo Rebecca, Natasha, and Hannah, for the love and for being there J. B. To Kaui, Pono, Koa, and Kai, for all the love and laughter P. D.
To Rebecca, Natasha, and Hannah, for the love and for being there J. B. To Kaui, Pono, Koa, and Kai, for all the love and laughter P. D. Editor in Chief: Donna Battista Acquisitions Editor: Katie Rowland
More information1. Introduction to Macroeconomics
Fletcher School of Law and Diplomacy, Tufts University 1. Introduction to Macroeconomics E212 Macroeconomics Prof George Alogoskoufis The Scope of Macroeconomics Macroeconomics, deals with the determination
More informationUnit 6 Measuring the Economy
Unit 6 Measuring the Economy - Study Guide - Answer, Explain and define the following: 1) GNP 2) GDP 3) Dept. of Commerce 4) Intermediate goods 5) Disposable personal income 6) Contraction 7) Recession
More informationGross Domestic Product
Gross Domestic Product In this lesson, students will be able to identify characteristics of the Gross Domestic Product. Students will be able to identify and/or define the following terms: Gross Domestic
More informationChapter 10: Economic Growth, the Financial System, and Business Cycles
Chapter 10: Economic Growth, the Financial System, and Business Cycles Yulei Luo SEF of HKU February 18, 2013 Learning Objectives 1. Discuss the importance of long-run economic growth. 2. Discuss the role
More informationMacroeconomics CHAPTER 6. Macroeconomics: The Big Picture
Macroeconomics CHAPTER 6 Macroeconomics: The Big Picture What you will learn in this chapter: An overview of macroeconomics, the study of the economy as a whole, and how it differs from microeconomics
More informationPatterns of Unemployment
Patterns of Unemployment By: OpenStaxCollege Let s look at how unemployment rates have changed over time and how various groups of people are affected by unemployment differently. The Historical U.S. Unemployment
More informationchapter: Aggregate Demand and Aggregate Supply Aggregate Demand The Aggregate Demand Curve The Aggregate Demand Curve
>> chapter: 1 Demand and Supply Krugman/Wells WHAT YOU WILL LEARN IN THIS CHAPTER " How the demand curve illustrates the relationship between the and the quantity of output demanded in the economy " How
More informationUnited Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6 10 Kirby Street, London EC 1N 8TS.
Vice President, Business Publishing: Donna Battista Senior Acquisitions Editor: Lacey Vitetta Editorial Assistant: Christine Donovan Vice President, Product Marketing: Maggie Moylan Director of Marketing,
More informationAggregate Demand and Aggregate Supply
chapter: Krugman/Wells 28 Aggregate Demand and Aggregate Supply The following materials are taken from Chap. 28, Economics, 2 nd ed., Krugman and Wells(2009), Worth Palgrave MaCmillan. 1 of 58 WHAT YOU
More informationCHAPTER 6: MONITORING CYCLES, JOBS, AND THE PRICE LEVEL
Principles of Macroeconomics CHAPTER 6: MONITORING CYCLES, JOBS, AND THE PRICE LEVEL Learning Goals: A. A recession started in March 2001 and ended in November 2001. What defines a recession, who makes
More information5 MONITORING CYCLES, JOBS, AND THE PRICE LEVEL* Chapter. Key Concepts
Chapter 5 MONITORING CYCLES, JOBS, AND THE PRICE LEVEL* Key Concepts The Business Cycle The periodic but irregular up-and-down movement in production and jobs is the business cycle. Business cycles have
More informationObjectives AGGREGATE DEMAND AND AGGREGATE SUPPLY
AGGREGATE DEMAND 7 AND CHAPTER AGGREGATE SUPPLY Objectives After studying this chapter, you will able to Explain what determines aggregate supply Explain what determines aggregate demand Explain macroeconomic
More informationMACROECONOMICS - CLUTCH CH INTRODUCING ECONOMIC CONCEPTS.
!! www.clutchprep.com CONCEPT: INTRODUCING MACROECONOMIC CONCEPTS BUSINESS CYCLE Business Cycles describe the increases and decreases in economic activity that occur over periods of several years Employment
More informationModule 19 Equilibrium in the Aggregate Demand Aggregate Supply Model
What you will learn in this Module: The difference between short-run and long-run macroeconomic equilibrium The causes and effects of demand shocks and supply shocks How to determine if an economy is experiencing
More informationSSC 260 : Introduction to Social Sciences : Economic Section
SSC 260 : Introduction to Social Sciences : Economic Section Jaruwan Chontanawat Topic 2: Economic force in Daily life (II) : Introduction to Macroeconomics Outlines: Overview of Macroeconomics & Development
More informationChapter 8: Business Cycles
Chapter 8: Business Cycles Yulei Luo SEF of HKU March 27, 2014 Luo, Y. (SEF of HKU) ECON2102C/2220C: Macro Theory March 27, 2014 1 / 30 Chapter Outline What is a business cycle? The American business cycle:
More informationChapter 4. What Macroeconomics Tries to Explain
Chapter 4 What Macroeconomics Tries to Explain 1 Macroeconomic Goals Microeconomics Behavior of individual decision makers and individual markets Macroeconomics Broad outlines of the economy 1. Economic
More informationTwo New Indexes Offer a Broad View of Economic Activity in the New York New Jersey Region
C URRENT IN ECONOMICS FEDERAL RESERVE BANK OF NEW YORK Second I SSUES AND FINANCE district highlights Volume 5 Number 14 October 1999 Two New Indexes Offer a Broad View of Economic Activity in the New
More informationGROSS DOMESTIC PRODUCT
GROSS DOMESTIC PRODUCT EQ: HOW ARE GROSS DOMESTIC PRODUCT AND GROSS NATIONAL PRODUCT INFLUENCED BY BUSINESS CYCLES? IN THIS LESSON, STUDENTS WILL BE ABLE TO IDENTIFY CHARACTERISTICS OF THE GROSS DOMESTIC
More informationConsumption Inequality in Canada, Sam Norris and Krishna Pendakur
Consumption Inequality in Canada, 1997-2009 Sam Norris and Krishna Pendakur Inequality has rightly been hailed as one of the major public policy challenges of the twenty-first century. In all member countries
More informationUnit 6 Measuring and Monitoring Economics (Ch 12 and 13)
Unit 6 Measuring and Monitoring Economics (Ch 12 and 13) -Macroeconomics 0 & Microeconomics- Government tries to prevent free enterprise from having wild swings in economic behavior. Microeconomics - analyzes
More informationIntroduction. Learning Objectives. Learning Objectives. Chapter 7. Explain how the U.S. government calculates the official unemployment rate
Chapter 7 The Macroeconomy:, Inflation, and Deflation Introduction Why is it that the responsibility for announcing the start of economic contractions and expansions does not rest with elected officials?
More information10.2 Recent Shocks to the Macroeconomy Introduction. Housing Prices. Chapter 10 The Great Recession: A First Look
Chapter 10 The Great Recession: A First Look By Charles I. Jones Media Slides Created By Dave Brown Penn State University 10.2 Recent Shocks to the Macroeconomy What shocks to the macroeconomy have caused
More informationCatalogue no XIE. Income in Canada. Statistics Canada. Statistique Canada
Catalogue no. 75-202-XIE Income in Canada 1999 Statistics Canada Statistique Canada How to obtain more information Specific inquiries about this product and related statistics or services should be directed
More informationGeneral Economic Outlook Recession! Will it be Short and Shallow?
General Economic Outlook Recession! Will it be Short and Shallow? Larry DeBoer January 2002 We re in a recession. The National Bureau of Economic Research (NBER), the quasiofficial arbiter of business
More informationThe U.S. Current Account Balance and the Business Cycle
The U.S. Current Account Balance and the Business Cycle Prepared for: Macroeconomic Theory American University Prof. R. Blecker Author: Brian Dew brianwdew@gmail.com November 19, 2015 November 19, 2015
More informationFoundations of Finance
GLOBAL EDITION Foundations of Finance The Logic and Practice of Financial Management EIGHTH EDITION Keown Martin Petty Editor in Chief: Donna Battista Acquisitions Editor: Katie Rowland Publisher, Global
More informationPart V: Introduction to Macroeconomics 19. The Wealth of Nations: Defining and
Part V: Introduction to s 19. 20. Aggregate Incomes 1 / 56 Chapter 19 Defining and 2017.8.9. 2 / 56 1 2 3 4 3 / 56 Chapter 19 Q: In the United States, what is the total market value of annual economic
More informationInstructor s Manual. Fundamentals of Financial Management. Thirteenth edition. James C. Van Horne John M. Wachowicz, Jr.
Instructor s Manual Fundamentals of Financial Management Thirteenth edition James C. Van Horne John M. Wachowicz, Jr. For further instructor material please visit: www.pearsoned.co.uk/wachowicz ISBN: 978-0-273-71364-7
More informationDEPRESSION SPECIAL REPORT. Number 52. August 1, Current Economic Downturn Is Worst Since Great Depression
DEPRESSION SPECIAL REPORT Number 52 August 1, 2009 Current Economic Downturn Is Worst Since Great Depression Recession Started a Year Earlier Than Official Reckoning Business Contraction Triggered Systemic
More informationChapter 9 Inflation Modified by: Yun Wang Fall 2017, Florida International University
PRINCIPLES OF MACROECONOMICS Chapter 9 Inflation Modified by: Yun Wang Fall 2017, Florida International University FIGURE 9.1 This bill was worth 100 billion Zimbabwean dollars when issued in 2008. There
More informationYour Name: Final Exam: 18 Dec 2003 Econ 200 David Reiley
Your Name: Final Exam: 18 Dec 2003 Econ 200 David Reiley You have 120 minutes to take this exam. There are a total of 100 points possible, on 10 multiple-choice questions, and 3 multi-part essay questions.
More informationUnit 7 Measuring the Economy
Unit 7 Measuring the Economy - Study Guide - Answer, Explain and define the following: 1) GNP 2) GDP 3) Dept. of Commerce 4) Intermediate goods 5) Disposable personal income 6) Contraction 7) Recession
More informationUnemployment and Inflation. 1 of of 29
1 of 29 2 of 29 In early June 2008, the Bureau of Labor Statistics (BLS) announced that the unemployment rate for May 2008 was 5.5 percent. P R E P A R E D B Y FERNANDO QUIJANO, YVONN QUIJANO, AND XIAO
More informationNBER WORKING PAPER SERIES U.S. GROWTH IN THE DECADE AHEAD. Martin S. Feldstein. Working Paper
NBER WORKING PAPER SERIES U.S. GROWTH IN THE DECADE AHEAD Martin S. Feldstein Working Paper 15685 http://www.nber.org/papers/w15685 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge,
More informationChapter 11 Macroeconomic Issues: Economic Growth and the Business Cycle
Chapter 11 Macroeconomic Issues: Economic Growth and the Business Cycle Multiple Choice Questions Choose the one alternative that best completes the statement or answers the question. 1. The sources of
More informationDiscussion of paper: Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis. By Robert E. Hall
Discussion of paper: Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis By Robert E. Hall Hoover Institution and Department of Economics, Stanford University National Bureau of
More informationInflation: the value of the pound
Inflation: the value of the pound 1750-2011 RESEARCH PAPER 12/31 29 May 2012 The Library is often asked how the purchasing power of the pound has changed over various periods. This paper presents data
More information3.1 Introduction. 3.2 Growth over the Very Long Run. 3.1 Introduction. Part 2: The Long Run. An Overview of Long-Run Economic Growth
Part 2: The Long Run Media Slides Created By Dave Brown Penn State University 3.1 Introduction In this chapter, we learn: Some tools used to study economic growth, including how to calculate growth rates.
More informationSaving, wealth and consumption
By Melissa Davey of the Bank s Structural Economic Analysis Division. The UK household saving ratio has recently fallen to its lowest level since 19. A key influence has been the large increase in the
More informationMultiple Choice Questions Solutions are provided directly when you do the online tests.
SOLUTIONS Multiple Choice Questions Solutions are provided directly when you do the online tests. Numerical Questions 1. Nominal and Real GDP Suppose than an economy consists of only types of products:
More information2/14/2008. The circular flow of goods and incomes. firms and households. goods markets. Goods and services. real flows: goods and services
The circular flow of income Chapter 22 Introduction to Macroeconomics Economics, 4 th edition Stiglitz & Walsh firms and households goods markets real flows: goods and services The Economic Problem Goods
More informationOCR Economics A-level
OCR Economics A-level Macroeconomics Topic 3: Application of Policy Instruments 3.5 Approaches to policy and macroeconomic context Notes Explain why approaches to macroeconomic policy change in accordance
More informationMacroeconomics, 7e (Blanchard) Chapter 2: A Tour of the Book. 2.1 Aggregate Output.
Macroeconomics, 7e (Blanchard) Chapter 2: A Tour of the Book 2.1 Aggregate Output. 1) Fill in the blank for the following: GDP is the value of all produced in a given period. A) final and intermediate
More informationChapter 9: Unemployment and Inflation
Chapter 9: Unemployment and Inflation Yulei Luo SEF of HKU January 28, 2013 Learning Objectives 1. Measuring the Unemployment Rate, the Labor Force Participation Rate, and the Employment Population Ratio.
More informationThe Productivity to Paycheck Gap: What the Data Show
The Productivity to Paycheck Gap: What the Data Show The Real Cause of Lagging Wages Dean Baker April 2007 Center for Economic and Policy Research 1611 Connecticut Avenue, NW, Suite 400 Washington, D.C.
More informationInternational Journal of Business and Economic Development Vol. 4 Number 1 March 2016
A sluggish U.S. economy is no surprise: Declining the rate of growth of profits and other indicators in the last three quarters of 2015 predicted a slowdown in the US economy in the coming months Bob Namvar
More informationGlobal Business Cycles
Global Business Cycles M. Ayhan Kose, Prakash Loungani, and Marco E. Terrones April 29 The 29 forecasts of economic activity, if realized, would qualify this year as the most severe global recession during
More informationChapter 15: Fiscal Policy Section 2
Chapter 15: Fiscal Policy Section 2 Objectives 1. Compare and Contrast classical economics and Keynesian economics. 2. Explain the basic principles of supplyside economics. 3. Describe the role that fiscal
More informationStriking it Richer: The Evolution of Top Incomes in the United States (Updated with 2009 and 2010 estimates)
Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2009 and 2010 estimates) Emmanuel Saez March 2, 2012 What s new for recent years? Great Recession 2007-2009 During the
More informationThe Measurement and Calculation of Inflation
Printed Page 142 [Notes/Highlighting] The Measurement and Calculation of Inflation How the inflation rate is measured What a price index is and how it is calculated The importance of the consumer price
More informationUnit 2: Measurement of Economic Performance Tracking GDP Over Time
Unit 2: Measurement of Economic Performance Tracking GDP Over Time Key points A business cycle is the relatively short-term movement of the economy in and out of recession. A significant decline in national
More informationAlmost everyone is familiar with the
Prosperity: Just How Good Has It Been for the Labor Market? Investing Public Funds in the 21st Century Seminar Co-sponsored by the Missouri State Treasurer, the Missouri Municipal League, GFOA of Missouri,
More information