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Chapter 6;Money
Spending and taxes
Other factors;§6.1 Aggregate Supply;Aggregate demand: The total amount that different sectors in the economy willingly spend in a given period.;Aggregate supply curve: Represent the level of total national output that will be produced at each possible price level, other things holding constant.;2. Determinations of AS;1) Potential output;Sustainable level of potential output
The output between the extremes of high and low utilization of capacity.
Factors affecting potential output (P.559)
;2)Inputs costs;3. Shifts of the AS Curve;1) Shifts rightward or leftward by potential output;2) Shifts upward or downward by inputs costs;3)co-effect of output and costs;4.Aggregate Supply in the Short Run and Long Run;1)Controversy: flat, steep, vertical;2) Aggregate supply curve in the short run;4) Reasons to the difference between long and short run AS curve;§6.2 unemployment;1. Measurement of unemployment; unemployed: people who are not employed but are actively looking for work or waiting to return to work. It concludes the condition followed:
If he or she is not working and:
i) has made specific efforts to find a job during the last 4 weeks;
ii) has been laid off from a job and is waiting to be recalled;
iii) has get a job and is waiting to report in the next month
;Not in the labor force: such as the people who is keeping house, retired, too ill to work, or not looking for work.
Labor force: includes the employment and the unemployment.
Unemployment rate: the number of unemployment divided by the total labor force.;2. Okun’s law;2) Example
Potential GDP grew at 3 percent per year, increasing a total of 9 percent over the 3-year period. By contrast, the actual GDP did not grow at all during 1979-1982. What is the movement of the unemployment rate? (the unemployment rate is 5.8% in 1979.);3. Reasons of unemployment;1) Three kinds of unemployment;Structural unemployment
Definition: A kind of unemployment which arises becau
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