LAWS101 Study Guide - Capital Market, Stagflation, Autonomous Consumption
20 Jan 2017
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(regular time/place: monday, dec. 9th; 10:15-11:45am; stolkin auditorium- physics bldg) Depression: recession actual gdp falls for two consecutive quarters or, depression prolonged, deep decline in gdp (great more. Depression: labor terms, unemployment 3 types: define, frictional, structural, demand-deficient unemployment, enough jobs, people haven"t found jobs yet. Happens because job search takes time: enough jobs, a mismatch between skills and jobs. Happens because economy grows/changes: not enough jobs for all actively seeking employment (unhealthy enconomy, natural rate of unemployment, sum of the frictional and structural rates i. ii. If estimated as 4% and actual u-rate is 7%, the 3% difference is due to demand-deficient unemployment. If economy is at full employment, the unemployment rate equals the natural rate (cannot be 0%: problems with unemployment rate, duration in which someone is unemployed, discouraged workers, underemployed. Inflation: real vs. nominal values (e. g. gdp) This causes a fall in purchasing power of money: deflation the price level falls.
