ECF1200 Lecture Notes - Lecture 2: Business Cycle, Longrun, Macroeconomics
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Learning objectives: discuss the importance of long-run economic growth and its impact on living standards, discuss the role of the financial system in facilitating long-run economic growth, understand what happens during the business cycle. Long-run economic growth is the key to rising living standards (lo1: business cycle: alternating periods of economic expansion and economic contraction relative to the long-term trend rate of economic growth. Long-run economic growth: the process by which rising productivity increases the average standard of living: real gdp per capita is used to measure changing living standards over time. Calculating growth rates and the rule of 70. Previous: economic growth rate: the rate of change in real gdp from one year to the next. Week 2: economic growth, the financial system and business cycles: for example, if the growth rate of china is 10%, the rule of 70 predicts it would take seven years, or 70/10, for china"s real gdp to double.