ECON 1102 Chapter Notes - Chapter 9: Arbitrariness, Homicide, Market Basket
4 Apr 2016
School
Department
Course
Professor
Document Summary
Alternating increases and decreases in economic activity over time. Phases of the business cycle: peak, recession, trough, expansion. The unemployment rate is the percentage of the labour force that is unemployed. At nru: the economy is at potential gdp. Occurs when there is no cyclical unemployment. Gdp gap = actual gdp - potential gdp. Every 1% of cyclical unemployment creates a 2% gdp gap. 8. 3% - 6. 5% = 1. 8% (gap % terms) 1. 8% x 2 = 3. 6% (apply okun"s law) Increases poverty, heightens racial and ethnic tensions, and reduces hope for material advancement. Severe unemployment can lead to rapid and violent social and political change. Higher unemployment linked to increases in suicide, homicide, and physical and mental illness. Meaning of in ation: a rise in the general level of prices. Consumer price index (cpi): an index that measures the prices of a xed market basket of goods and services that is bought by a typical consumer.
