EC202 1nd Edition Lecture 22 Outline of Last Lecture I. RecessionOutline of Current Lecture II. Gaps III. Types of unemploymentCurrent Lecture-recessionary gap (Y* > Y )-a positive output gap, (Y* - Y )>0, which occurs when potential output exceeds actual output-a condition when an economy’s capital and labor resources may not be fully utilized-expansionary gap (Y* < Y )-a negative output gap, (Y* - Y )<0, which occurs when actual output is higher than potential output-a condition when an economy’s resources are being over-utilized-during a recessionary gap-low utilization of resources occurs-a high unemployment rate causes output to fall below potential-during an expansionary gap-over utilization of resources occurs-low unemployment rate-hence, output is higher than potential-types of unemploymentThese 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.-frictional-short-term-normal labor search needed for efficiency-voluntary-structural-long-term -mismatch between skills of worker and skills required for jobs-involuntary-cyclical-extra unemployment during periods of recession-positive during recessions
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