ECON 050 Lecture Notes - Lecture 15: Potential Output, Core Inflation, Macroeconomics

• School: College of The Sequoias
• Department: Economics (ECON)
• Course: ECON 050
• Professor: anderson

Document Summary

Actual unemployment can be above or fall below the nru. Gdp gap = actual gdp potential gdp. Every 1% of cyclical unemployment creates a 2% gdp gap. Loss of skills and loss of self-respect. Suicide, homicide, fatal heart attacks, mental illness. Can lead to violent social and political change. Not all prices rise at the same rate, some may stay constant while others fluctuate. Inflation reduces the purchasing power of money. Demand-pull continues as long as the excess spending continues. Too much spending chasing too few goods . Central bank issues too much money (which means that demand for goods will go up due to people having the capacity to purchase goods) Demanding more of goods and services than the market is able to supply, this pushes up the price in order to decrease demand. Due to a rise in per-unit input costs.