ECON 102 Chapter Notes -Frictional Unemployment, Potential Output, Output Gap

• School: UBC
• Department: Economics
• Course: ECON 102
• Professor: Lanny Zrill

Document Summary

Macroeconomics study of the determination of economic aggregates such as total output, total employment, the price level and the rate of economic growth. Short-run behavior or macroeconomic variables output, employment, inflation, government policy: study of business cycles. Long-run behavior of some variables aggregate output: study of economic growth how investment and technological change affect our material living standards. Based explicitly on microeconomic foundations: build models on optimizers, assumption: wages and prices are perfectly flexible and can adjust quickly. Based implicitly on microeconomic foundations: construct their models by using aggregate relationships for consumption, investment and employment, assumption: nature of institutions wages and prices slow to adjust disequilibrium for longer. National product nation"s overall level of economic activity value of its total production of goods and services. Quantity of total output measured in dollars add up the dollar values of the different products.