ECON 201 192001 7 howbesrtoallocatcsardntesonrasannngcsmpleningus es wide Phenomenonemmy leg inflanin unempbymen economicgrowth household andfirmsmake decisions andhowtheyinteractthe mankey nteruined g MICRo si siplify the complex word siniilid representonionsof another value a morecompliand reality judgemem makenormanin stain dennsnip Economisis employee scientific method make positivity T circularflow Dig ram 6ima t used in productions Resoun es n Inpunf production Mankens Actors YMankeis IO houscholdafms for good for factors of production services Revenue Speech Raigmiili sc On wages rem phrts 9 Income 1 2 3 1 Households 2 Firms 1 Markets for Goods and Services 2 Markets for Factors of Production e labor land capital Real ow Money ow ey T T T production CPP F Possibilities Fvoniten graph iambinatimsofzgadstheean mg can possibilypsducegiventhavalibleresune se technohyy 2goods bp yoisf Impossible Efcienz all resources fully utilized are st The PPF 2OPPjit bga Mang along PPF involves shfinggrkbe fm slope Yge eg the Oc of1 role to another production vwwru one The shape of PPF Sgh 2 line Opp ar straightline bow Shaped increasing Opp on 2cbu YT pls opp an high behavior of buyes the annum of goal than buyers Demand comes from the QD willing and able price Law of Demand the qdofagufen is when the price ofthe goods rises otherthings equal purihase az alternative to QD in the markers demanded byall buyes isthe sum ofthe9 ar each price d H s Qdt K s Ad Marker ej D mand Curve Shifie buyers NT D d N D CC y Income normal god Inferiorgood prices of lied gods Two goals are substime eg C A tastes positively good negatively BD increase expectanions Dic Affect consumers buying decisions Summary Variablesthen affect Demand Variable A change Price causes in variable a moveman along the D curve No of Buyers Iname TastesshifisDcure Price of related go us Supply of any good is theamount than sellers are willingant comes from the behavior of sellers QS able to sell az alternative prices Law of supply the claim than the quantity supplied ofgood rises when the price ofgoodrises other things equal Inpun prices Supply curve shifters eg Wages prices of row materials Technology to right Number of sellers Expectations S shif lkward 5 The supply function Qx S f PxtWY H p pn otnpms Equilibrium D S d Surplus Qs Q D thee supply Shortage Qi Qs Gross Domestic Podun GDP the marka value ofall final goods 2services produced within a country in a givenperiod f time intheprahanm Show as currency A Fit gods intended In end user of other 9 Intermediate goods used as components or ingredients GDP includes tangibk godsandintangiblesernig aincludescurrentlyp roduelgoals hn goods producet in the pasz Measuresthevalueofprsduezinthoc us hihu a country s borders whetherdone by its own citizenson forengines Iscutethere Usually A i GDFis total spending Components of a DP Recall 4 csmponemsiGnsu mpinthvesmen ntGovemmenP unhase s eN nl T Y Ct It Gt N X I a Nx V Consumption CC I spending by households on goods and senies Tal Does me include purchasing of new buses on the purchase of financial assets Investmen Total Sending on goodsthan will be used in the future to praluamnegsidscdnm me like Stocks and hounds Governmen Purchases Allspending thegovernman Includetransfer payments in the goods and Senias purchasety a NerixportsIExporis impo is GDPVSGrossNazionnnPuae i li T n GNP GDP d n Iamy V1 fsm Aboard GNP GDP wm Real us Nominal GDP Inflation candistorz ecsnomz variableslike GDP so ne hare 2 GDP versions Nominal GDP Values ourpuz using curran prices me corrected fr inflation RealGmDP 1 Values ourpur using the prices of a base year is arrectedf T Increases inflcnineii si Pjx4ot 2x1700 6 t 2 11 472 1 xj 10X6 4 2 12 84 3 167 2212 2013 Nominal app reflects bthpand Q Real GDP GDPwouldchangeif Pisantan Inflation Average Increasein pricelevel AHennativeMeasuresofInfiain GDPtDGPPDcfktn hn O consumer pileIndex sumer Price Inda Producer Price Inda PCE Deflatsr puzlur PUE Deftun Theabppeflann Amessureof theoverall levelot Definin sn lhsxigi onewayto measure the economy sinflation rate is to compute the percentageincrease in GR deflaton from one year is the nena Leg 10 1 How isCPDI calculated t IO anyoneInda CPI Fix the basket 0 surveysconsumes to determine what s inthetypical consumers shopping basket Findtheprices collects data on the prices ofall thegoods in th basket Compute the buslet s au Use the prices to compare all prices Choose a bus amlcsmpunetheindexTCPIihanyyeusequulispoxo tbastahcn yea es srotbasker in baseyear Computetheinflanon rue thepercentage change intheCPIfromthe preceding period inflationrune 170 Ct It G C II G us GDP Deflann CPI Imported consumergoods IncludedinCPI excluded from GDPdeflats Capital Goods Excluded from CPI Included in GDPdeflutncif produced domestically Personal Csnsuwpein The PCE deflation Amthen measure ofthepialevdib Poml Consumption Expenditure Dflatnther ttoreulcon atioofnominul snmenspendngHnon PE like CPI oincludsgcsnsumerincludesimportedcsnsumengscorrecrvariabl es f Infknion Comparing Dollar Figures from BfleemTimes Inflation makes it harden to compare dollar amounts from different times ey the minnum wedge 125 In Dec 1905 Us 7ci in DecDB Amoum intoday s dolla ynmixPnuelael t ly dollars Pricelevelin your T TI Indexation Adollar amount is indexed for inflarim if inis automatically csrrecnedfninflcn sn Real and Nominal Interest Rates The nominal interest rate mcsrrelutedfrinflcnim ru te of grown inthe vale of a deposit or debi The real Interen rare corrected fr infunion Rene of growth inthepunchasing power of a dep it of debzRenlintersiedrcne usmialintereenruiej cinflazionnt es Frictional Structul Cyclical Labor Force Statist is BLS divides people into 3groups labr employed paid employees self employed andunpaid Ione workers in afamily business Unemployed pespe meworking whohave lookedforwork during previous 4works not in the labor force everyone else T laborfree is the total number of workers includethe employedand unemployed Unemployment Rate 100xgpogedg tl 1 Labor F roparticiparisnRcneinsxtinnbnnt tdit no in Labor Force employed t Unemployed Aduhpp laborfree turn in labor force U rate or the health of the labor Marker X a perfect indicator ofjoblessness exclude discouraged norkes Aches mt distinguish between full time andpuntme or people mrkig aparr time because full time work jobs are me availiable Types Frictional t Unenply man people Moving btwen jobs on inn the labor maker 4Structural eg
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