ECN 204 Lecture Notes - Frictional Unemployment, Nominal Interest Rate, Real Interest Rate
26 Feb 2013
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Canada and other industrial economies have gone through periods of fluctuations in real gdp, employment, and price level: although they have certain phases in common: Expansion: business cycles vary in duration and intensity. Although economists explain the business cycle in terms of underlying causal factors such as: Financial crises: they generally agree that the level of total spending is the immediate determinant of real output and employment. Economists distinguish among four types of employment: Seasonal: the full-employment or natural rate of unemployment, which is made up of frictional and structural unemployment, is currently 6-7 percent, the presence of part-time and discouraged workers makes it difficult to measure unemployment accurately. Unemployment rates differ because nations have different natural rates of unemployment and often are in different phases of their business cycles. Inflation is a rise in the general price level and is measured in canada by the.
