Chapter 8: Fiscal Policy: Coping with Inflation & Unemployment 6/19/2015.

Slides:

Advertisements

Similar presentations

Begin $100 $200 $300 $400 $500 GraphsEconomicEquations Unit 1 Unit 3 KeyTerms Unit 2.

Advertisements

INTRODUCTION TO ECONOMIC GROWTH AND INSTABILITY Pertemuan 5 Matakuliah: J0594-Teori Ekonomi Tahun: 2009.

Chapter 5: Monitoring Jobs and Inflation

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 06 Every Macroeconomic Word You Ever Heard: Gross Domestic.

© 2005 Thomson C hapter 23 Fiscal Policy: Coping with Inflation and Unemployment.

Unemployment Why is unemployment a problem? – Lost production and income – Lost human capital Measuring unemployment – The Current Population Survey Monthly.

Slides are prepared by Dr. Amy Peng, Ryerson University Chapter Five Output, Business Cycles, and Employment Macroeconomics by Curtis, Irvine and Begg.

Chapter 21 Consumption & Investment. GDP = C + I + G + ( X – M) GDP = C + I + G GDP = C + I.

Chapter 5: Monitoring Jobs and Inflation Measures of activity in the labor market – Unemployment – labor force participation – employment-population ratio.

Chapter 8 Unemployment and Inflation. Business Cycles  Business Cycle: the pattern of real GDP rising and falling.  Recession (Contraction): two or.

Chapter 6 Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, and Depression Copyright © 2010 by The McGraw-Hill.

Explorations in Economics

C hapter 23 Fiscal Policy: Coping with Inflation and Unemployment © 2002 South-Western.

Business Cycles  Economic Growth is a major goal  Measured by – increase in real GDP or increase in real GDP per capita  Sources of growth: 1) increase.

Chapter 26 Business Cycles, Unemployment, and Inflation Textbook Graphs and Tables Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 11 ©2010  Worth Publishers Unemployment and Inflation.

Recessionary and Inflationary Gaps and Fiscal Policy

8 - 1 Copyright McGraw-Hill/Irwin, 2002 Economic Growth The Business Cycle Unemployment Inflation Redistributive Effects of Inflation Anticipated Inflation.

In This Lecture….. Phases of the Business Cycle

8 - 1 Copyright McGraw-Hill/Irwin, 2002 Economic Growth The Business Cycle Unemployment Inflation Redistributive Effects of Inflation Anticipated Inflation.

Principles of MacroEconomics: Econ101.  Recurrent swings (up and down) in Real GDP; alternating periods of expansions and recessions.

Begin $100 $200 $300 $400 $500 Key Terms Economic Theories GDP/Inflations Government Policies Unemployment/EmploymentGraphs.

Types of UnemploymentandInflation The BAD BOYS OF THE ECONOMY.

AP Macro Week#6 Fall 2014.

 Circular Flow of Income is a simplified model of the economy that shows the flow of money through the economy.

1 Chapter 23 Fiscal Policy: Coping with Inflation and Unemployment Fred Gottheil 10/4/2015 © ©1999 South-Western College Publishing.

 The labor force includes all persons over age sixteen who are either working for pay or actively seeking paid employment.  People who are not employed.

AP Exam Review AP Macroeconomics MR. GRAHAM. 2 Unit 2: Measurement of Economic Performance (12-16%) Unit 2: Measurement of Economic Performance (12-16%)

Macro Chapter 7 Presentation 2. Labor Force The labor force consists of people who are willing and able to work Both those employed and those unemployed.

Principles of MacroEconomics: Econ101.  Recurrent swings (up and down) in Real GDP; alternating periods of expansions and recessions.

AP MACROECONOMICS THE BUSINESS CYCLE, UNEMPLOYMENT & INFLATION.

MACROECONOMICS BY CURTIS, IRVINE, AND BEGG SECOND CANADIAN EDITION MCGRAW-HILL RYERSON, © Chapter 5 Output, Business Cycles, and Employment.

Employment Statistics Employed You have a job (even if part time) Unemployed “Jobless, looking for jobs, and available to work” Must be ACTIVELY searching.

Unemployment. Define Unemployment The number of people who are actively looking for work but are not currently employed.

Ch 7.Intro to Economic Growth & Instability Why do we want economic growth??

Putting AD and AS together to get Equilibrium Price Level and Output

8 - 1 Copyright McGraw-Hill/Irwin, 2005 Economic Growth The Business Cycle Unemployment Inflation CPI Redistributive Effects of Inflation Anticipated.

Principles of MacroEconomics: Econ101 1 of 29.  In this chapter we take a look at the problem of unemployment  When is a person “unemployed”?  What.

8 - 1 Copyright McGraw-Hill/Irwin, 2002 Economic Growth The Business Cycle Unemployment Inflation Redistributive Effects of Inflation Anticipated Inflation.

Lecture Four Macroeconomic Concerns: Unemployment, Inflation, and Growth.

LECTURE 8 Economic Growth and Instability. Economic Growth Economic growth is defined as either: (a) An increase in real Gross Domestic Product (GDP)

UNEMPLOYMENT AND INFLATION “There is a short run trade-off between reducing inflation and reducing unemployment.” -Me, on the second day of class.

Chapter Twenty- Eight: Aggregate Supply, Aggregate Demand, and Inflation: Putting it All Together.

Chapter 13SectionMain Menu Unemployment What are the different types of unemployment? How are unemployment rates determined? What is full employment?

Objectives After studying this chapter, you will able to  Explain what determines aggregate supply  Explain what determines aggregate demand  Explain.

1 © ©1999 South-Western College Publishing PowerPoint Slides prepared by Ken Long Principles of Economics 2nd edition by Fred M Gottheil.

1. The more useful of the two definitions of economic growth for comparing living standards across economies is an increase in real GDP per capita.

Unemployment What is unemployment rate?. Unemployment Measuring Unemployment Measuring Unemployment Identifying the Employed and Unemployed Employed Employed.

1 of 35 chapter: 24 >> Krugman/Wells ©2009  Worth Publishers Unemployment and Inflation.

Copyright © 2008 Pearson Addison-Wesley. All rights reserved. Chapter 19 What Macroeconomics Is All About.

Business Cycles, Unemployment, and Inflation 9 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

What option for opening a restaurant are you still holding on to? 1. Take your savings and open the restaurant now. 2. Hold off for a year and open it.

Chapter 11 Economic Challenges Section 1 Unemployment.

Chapter 8 “The Business Cycle” Overview  Our economy has experienced a pattern of uneven growth throughout our history.  Some periods are marked by.

1 Sect. 3 - Measurement of Economic Performance Module 10 - The Circular Flow & GDP What you will learn: How economists use aggregate measures to track.

7 AGGREGATE DEMAND AND AGGREGATE SUPPLY CHAPTER.

Macroeconomics Key aggregates 1.  Macroeconomics  Study of the PPF  Lose the details  Study of aggregates  Lose the details  Key aggregates  GDP,

Chapter 5: Monitoring Jobs and Inflation

Chapter 6 Every Macroeconomic Word You Have Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession and Depression.

4-Types of Unemployment & Full Employment Theory

7 Introduction to Economic Growth and Instability.

Unemployment Chapter 6 McGraw-Hill/Irwin

Business Cycles, Unemployment, and Inflation

MA 1 d, e, f “Macroeconomic Activity”

Chapter 06 Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, and Depression.

Government Intervention in the Free Market?

Presentation transcript:

Chapter 8: Fiscal Policy: Coping with Inflation & Unemployment 6/19/2015

AS AD 1 Y1Y1 AD 2 AD 3 Price Level Aggregate Output Y2Y2 P1P1 P2P2 P3P3 0

Different Types of Unemployment: Frictionally Unemployed © Frictionally Unemployed © Structurally Unemployed © Cyclically Unemployed © Discouraged Workers © Underemployed Workers

1. Frictionally Unemployed: Relatively brief periods of unemployment caused by people deciding to voluntarily quit work in order to seek more attractive employment. 2. Structurally Unemployed: Unemployment that results from fundamental technological changes in production, or from the substitution of new goods for customary ones.

3. Cyclically Unemployed: Unemployment associated with the downturn and recession phases of the business cycle. 4. Discouraged Workers: Unemployed people who give up looking for work after experiencing persistent rejection in their attempts to find work.

5. Underemployed Worker: Workers employed in jobs that do not fully utilize their productive talents or experience.

Number of Workers and Type of Unemployment: Total Unemployment = = 1,400 True Unemployment Rate =

The Bureau of Labor Statistics (BLS): Two Questions: Q1. Are you presently gainfully employed? Q2. Are you actively seeking employment?

Number of Workers and Type of Unemployment: Labor Force =10,250 – 250 = 10,000 Actual Unemployment Rate =

Actual Unemployment Rate = 8.5% = 3.5%= Natural Rate of Unemployment BLS’s Rate of Unemployment Actual Rate of Unemployment = Natural Rate of Unemployment + Cyclical Rate of Unemployment 8.5% = 3.5% +5%

AS AD 1 Y1Y1 AD 2 AD 3 Price Level Aggregate Output Y2Y2 P1P1 P2P2 P3P3 0

Winners and Losers from Inflation: © People on fixed income © Lenders © Savers Who Loses from Inflation?

© Borrowers © Government Who Gains from Inflation? Moderating the Wins and Losses: Variable Rate of Interest Cost of Living Index (COLA)

AE 100 AE a Y Y AE b AD Price Level $ Recessionary Gap Inflationary Gap

Recessionary Gap: The amount by which aggregate expenditure falls short of the amount needed to generate full employment national output. Inflationary Gap: The amount by which aggregate expenditure exceeds the level needed to generate full employment national output.