Political Science 2211E Lecture Notes - Lecture 8: Disinflation, Aggregate Demand, Money Supply

• School: Western University
• Department: Political Science
• Course: Political Science 2211E
• Professor: Adam Harmes

Document Summary

The percentage of the labor force that is seeking employment but is not employed": does not include part-timers looking for full-time work, demand and unemployment, demand up, unemployment down, demand down, unemployment up. An increase in the general level of prices": measured through consumer price index (cpi) If demand goes up : growth up, unemployment down. If demand goes down : growth down, unemployment up. Inflation down: unemployment and inflation move in opposite ways (they also both suck) Monetary policy: governments control over interest rates through the central bank (bos, us fed, use interest rates to regulate demand and maintain balance between inflation and unemployment, money supply: increase amount of money, increase supply, prices go down. Slow growth or recession: demand down, unemployment up, growth down, inflation down, when a recession occurs , central banks will lower interest rates, lower interest rates increase demand. Interest rates down, unemployment down: growth up, inflation up.