ECO1102- Final Exam Guide - Comprehensive Notes for the exam ( 34 pages long!)

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: David Gray

Document Summary

# 1 real gdp has its ups and downs that comprise the business cycle, but this cycle is not regular (like the seasons) Recession = period of contracting real gdp and rising unemployment. # 2 many macroeconomic aggregates move together, although not necessarily by the same magnitude . # 3 as real gdp falls even slightly, unemployment skyrockets(cid:1031) . By mid-2009, the economy had shrunk about 3. 5 % points from its peak, but by mid-2009, the unemployment rate was over 2 % points higher than its trough. Designed to explain short-run fluctuations in equilibrium real gdp. Long-run real gdp determined by levels of inputs and productivity. The short-run changes around that trend in long-run real gdp is the focus of this model. Note that it does generate an equilibrium value for the composite price level p and the aggregate output level real gdp. Somewhat analogous to supply and demand model at the microeconomic level, but the foundations are different.