ECON 1113 1st Edition Lecture 8 Outline of Last Lecture I Macroeconomic Measurements A Measuring the Value of Economic Activity Gross Domestic Product GDP 1 Nominal GDP Current Dollar GDP 2 Real GDP Constant Dollar GDP B Measuring the Cost of Living Consumer Price Index CPI C Measuring Joblessness Unemployment Rate U L Outline of Current Lecture I Recent Developments in the Labor Market II Real GDP and the Business Cycle Current Lecture I II Recent Developments in the Labor Market A Wall Street Journal Article 1 US adds 257 000 jobs in January of 2015 2 Unemployment ticks up to 5 7 a Labor Force Employed Unemployed b L E U looking for a job c Unemployment rate U L or U E U d U L in December 56 999 5 6 e U L in January 57 1000 5 7 Real GDP and the Business Sector A The value of domestically produced goods and services valued at constant prices B Diagram of the Business Cycle 1 Unrealistic curvatures in generalized diagram 2 Although decreases exist in the oscillating curve it steadily increases 3 Expansion Phase increasing section of trend a Problem inflation rising prices as measured by some price index like the CPI 4 Contraction Phase decreasing section of trend also called a recession a Problem unemployment 5 Peak occurs after an expansion phase and before a contraction phase 6 Trough occurs after a contraction phase and before an expansion phase C Realistic Diagram of the Business Cycle Based on the early twentieth century 1 1914 1919 increase as WWI rages 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 2 3 4 5 6 7 1919 1921 post war decrease 1921 1929 increase of the roaring 20 s 1929 1939 decrease of the Great Depression 1939 1946 beginning of WWII Unemployment occurs during the decreases Inflation occurs during the increases
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