EC140 Chapter Notes - Chapter 19: Grater, Unemployment, Business Cycle

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5 Apr 2016
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


!" 
#$%&'

"
 !
"#$"
(!)
)!%&''
(*!
( +,-./0-.01,#
'(!)*+,
2,"
*!
33"- &" ,'
,!./
1,*.),'
,,./
*4,,3,
',,.,,./"*
$
54''!
6,1/'
0'
1 2+,7"
,7
,1
(0'3"
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Document Summary

Measure of the quanity of total produced output by a single naion in a one year period. The producion of goods and services leads to income. Nominal naional income= value of naional output at exising prices, there is no inlaion adjustment. Real naional income= calculated on prices of a base year. Potenial gdp is the amount of goods and services/ income that a country could be producing/receiving if all its resources were fully employed. Actual gdp is the real total amount of goods and services produced. The diference between potenial (y*) and actual (y) gdp is known as the output gap. States of the economy depending on the rate of growth in an economy. The economy is in maximum state of producion. There is low unemployment, high wages and output equal or above y* The peak is followed by a trough where there are unemployed resources, a decrease in output which is now under y*

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