ECO 202 Lecture Notes - Lecture 1: Outhouse, Credit Crunch, Disintermediation
13 Sep 2017
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Document Summary
Unique event but almost happened again in 2007/2008. Bad government policies caused the great depression and good government policies stopped another one from occurring in 2007/2008. Before we only had microeconomics and those concepts were applied to everything. The government thought that if all business lowered their prices everything would sell, false. Financial disintermediation: when too much savings is not borrowed or spent. Runs on bank: people run to the bank to take their money out. Hoarding: saving money at home instead of the bank. Gdp: gross domestic product: nation"s output for the year. Nominal wage rate: the amount you are paid per hour of work. Real wage rate: what you can buy with the nominal wage rate. Inflation: general increase in the prices for goods and services. Deflation: lowering of prices for goods and services. Discouraged workers: those who are able to work, unemployed, but not looking for a job.
