EC140 Chapter Notes - Chapter 19: Business Cycle

• School: WLU
• Department: Economics
• Course: EC140
• Professor: Ken Jackson

Document Summary

Macroeconomics: the study of the determination of economic aggregates - i. e. total output, total employment, price level and rate of economic growth. Behaviour results from activities in many different markets and from combined behaviour of millions of different decision makers. When aggregate output rises, output of many commodities and income rise. Unemployment rate rises -> workers suffer reduction in income. Significant disruptions in credit markets interest rates rise borrowers more difficult to finance purchases. Short-run behaviour of macro variables: output, employment and inflation and about how gov policy influences these variables: concerns study of business cycles. Examines long-run behaviour of same variables: study of economic growth explaining how investment and tech change affect our material living standards over long periods of time. National product: value of its total production of goods and services. Important to note production of goods and services generates income: value of national product is by definition equal to value of national income.