Bigpicture.pptVIP

Homework Chapter 22, Question 1, Question 7, Question 8, Question 11. * J. Michael McGuire, Ph.D. * Be happy no matter it is recession or expansion (Live Positively) “for we brought nothing into the world, so that we can take nothing out of it; but if we have food and clothing, we will be content.” (1 Tim 6:6-8) * Shishu Zhang, Ph.D. * * * * Figure Caption: Figure 6-2: The Business Cycle This is a stylized picture of the business cycle. The vertical axis measures either employment or total output in the economy. Periods when these two variables turn down are recessions; periods when they turn up are expansions. The point at which the economy turns down is a business-cycle peak; the point at which it turns up again is a business-cycle trough. * * Figure Caption: Figure 6-4: Three Recessions Some recessions are worse than others. This figure shows the path of industrial production in three recessions, in each case measured as a percentage of production at the business-cycle peak just before the recession started. The 2001 recession was relatively brief and mild compared with the recession of 1981–1982. And that recession was nothing compared with the gigantic, prolonged drop that marked the beginning of the Great Depression. Source: Federal Reserve Bank of St. Louis. * * Figure Caption: Figure 6-6: Growth, the Long View Over the long run, growth in real GDP per capita has dwarfed the ups and downs of the business cycle. Except for the recession that began the Great Depression, recessions are almost invisible. Source: Angus Maddison, Statistics on World Population, GDP, and Per Capita GDP, 1–2006AD, /maddison; Bureau of Economic Analysis. * * Figure Caption: Figure 6-7: Rising Prices Between 1970 and August 2008, American workers’ hourly earnings rose by 431%. But the prices of just about all the goods bought by workers also rose, some by more, some by less. Overall, the rising cost of living offset most of the rise in the average U.S. worker’s wage. Source: Bure