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What is the growth equation
(x(t)-x(t-1))/x(t-1)
What is growth of real GDP per capita?
total output divided by total population
What is the read GDP growth % in the U.S?
3.2,(2 per capita)
What are the points of the business cycle
Expansion, Recession, Peak, Trough, Secular growth trend
Expansions become longer________
and recessions become shorter
What do classical economists believe
that business cycles are temporary and favor laissez-faire
Keynesian economists
believe that business cycles reflect underlying problems that can be addressed with government policies
Long run
Focus on how to increase growth, focus on supply factors, not related to the business cycle
Short-Run
how to get the economy operating at its potential output, focuses on demand factors, keynesian, require government action
When is a person considered unempolyed
when they are wiling and able to work, but are not working
Cyclical unemployment
fluctuations in economic activity related to the business cycle
Seasonal unemployment
seasonal fluctuations in economic activity
structural unemployment
when there are jobs, but theres a mismatch between the skills employers demand and the unemployed have
Frictional unemployment
resulting from switching jobs or new entrants
Target rate of unemployment
the lowest sustainable rate of unemployment that policy makers believe is achievable under existing conditions
The difference between GDP growth and GDP per capita is…
population growth
