ECON 1000 Lecture Notes - Lecture 15: Real Wages, Aggregate Demand, Aggregate Supply
1 May 2017
School
Department
Course
Professor
Document Summary
Figures are from the 4th edition text not the 6th edition. Chapter 14: aggregate demand and aggregate supply - March 8, 13 - lecture 15, 16, 17. Economy tends to grow over time due to factor accumulation and technological progress. But in some years growth is slow or even negative. Use model of ad & as to answer these questions. Fluctuations are often referred to as the business cycle. Misleading as the ter(cid:373) (cid:862)cycle(cid:863) suggests regular and predicta(cid:271)le. Data shows time between recessions can vary a lot. Real gdp is the most commonly used variable to monitor short-run changes in the economy. While direction of change is often the same magnitude can di er. When gdp falls the rate of unemployment rises. Unemployment rate rose sharply in three of four recessions. As the economy recovers unemployment falls back towards the natural rate. Previous chapters dealt with what determines macro variables in the long run.
