Class Notes (808,652)
Economics (470)
ECON 102 (134)
Lecture

# 01.21 - Macroeconomics Indicators.docx

3 Pages
133 Views

School
University of British Columbia
Department
Economics
Course
ECON 102
Professor
Lanny Zrill
Semester
Winter

Description
Macroeconomics Indicators 01-21-2013 Chapter 19 National Income  National income is typically measured by measuring the economy’s input  Gross Domestic Product (GDP) – most common output measure o GDP can be measured using Nominal (Current prices) or Real (Constant Prices) quantities o We focus on Real GDP (How much stuff people can consume; income) – Chapter 20  Two factors that change constantly: o Quantity produced (available for consumption) o Prices  Graph of Real GDP o Constant growth rate – constant upward slope (well approximated by a straight line) o Rarely goes down o Real GDP grows at roughly the same rate from quarter to quarter Stylized Facts Regarding Real GDP  Real GDP is increasing (on average) over time – Economic Growth o Average Quarterly Growth Rate = 0.83% o Implies an Annual Average Growth Rate = 3.4%  However, Real GDP is constantly fluctuating around its upward trend – Business Cycles o Fluctuations around the growth rate = business cycles  A recession occurs when Real GDP growth is below the average growth rate Employment, Unemployment, and the Labour Force  Employment – the number of people 15 years old or older who have jobs  Unemployment – number of persons 15 years old or older who are not employed and are actively searching for a job o Acceptable unemployment: Structural unemployment – when industries die  train them for new industries (takes some time) – efficient economically o Acceptable unemployment: Reallocation of resources (human capital) – ex. when someone at Starbucks gets a degree and quits to look for a more suitable job o Unacceptable unemployment: Cyclical unemployment – unemployment brought about by a recession – not economically efficient  Takes a long time for unemployment to recover after a recession  Labour force – the number of persons employed plus the number of persons who are unemployed  Unemployment rate – unemployment expressed as a percentage of the labour force; fraction of people who want to work but can’t find jobs o Never zero Participation Rate  Fraction of the working population that is either employed or unemployed – fraction that actually wants a job  Discouraged worker – person who was actively looking for a job for a long time and has given up after long term unemployment o Not counted in the employment rate anymore o Hidden unemployment  Unemployment rate tends to understate the severity of a recession  Know the difference/significance between Participation and Unemployment Rate Who cares about unemployment anyway?  Humane answer: We all should. Unemployment represents families that are struggling
More Less

Related notes for ECON 102

OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Join to view

OR

By registering, I agree to the Terms and Privacy Policies
Just a few more details

So we can recommend you notes for your school.