ECON 104 1st Edition Lecture 4 Outline of Last Lecture I The Development of Macroeconomics A Where Macroeconomics Came From B How We Affected the Macroeconomy C How Inflation Enters the Formula II Depression vs Recession A Definition Examples B Differences With Latest Recession III The Three Goals of Macroeconomics IV Goal 1 Employment A Current Unemployment B How Unemployment is Measured C How Labor Force Participation Rates Show Us Problems With The Economy D Five Types of Unemployment E Costs of Unemployment and Underemployment Outline of Current Lecture I Second Goal of Microeconomics Price Stability A Inflation and Deflation B Definitions Current Lecture I Second Goal of Microeconomics Price Stability Inflation and Deflation Low Inflation is the goal 2 4 inflation is generally considered low but there is much debate about this 1979 13 3 inflation July 2007 July 2008 5 6 inflation Deflation We have had some deflation in the last 2 years and only 4 deflation for 2009 Average Inflation Rate 2010 1 6 2011 3 2 2012 2 1 These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute 2013 1 5 Deflation is a sign of a bad economy a little bit of inflation is actually good However too much inflation may be a sign that the economy is too booming and could be detrimental Right now our economy is not inflating enough Definitions Inflation the rise in the general level of prices Inflation is not defined by JUST oil prices or JUST one food item it is defined by all of the things we buy as an economy Inflation Rate the percentage of change in the price index Deflation a decrease in the average level of prices Hyper Inflation unbelievably high inflation Stagflation inflation and unemployment at the same time
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