PPT-Potential GDP and the Natural Unemployment Rate

The Three Main S chools of Thought Potential GDP The production Function The Demand and Supply of Labor The Natural Unemployment Rate The Classical view Market industrialized economies are inherently . Inflation. Perfection. Deflation. 1. 2. But first a little behavioral economics. World’s Fiercest Enemy. Unemployment. Unemployment is the . the. . state. . of. . being out of work, . especially. . involuntarily. The Unemployment rate is determined by dividing all the unemployed by the people currently in the labor force. Mankiw. M. acroeconomics. Principles . of. Sixth Edition. 15. In this chapter, . look for the answers to these questions:. How is unemployment measured?. What is the “natural rate of unemployment”? . Swings in the. Economic Pendulum . Instability in the . Growth . of Real . GDP: 1960-2013. Although real GDP in the . United States has . grown at an average rate of approximately 3%, the growth has been characterized by economic ups-and-downs. . Inflation. Perfection. Deflation. 1. 2. But first a little behavioral economics. By: Ben . Quick. SSEMA1a,b. The unemployment rate shows the percentage of unemployed people divided by the total number of people in the civilian labor force . The unemployment rate understates the unemployment rate because it does not include “discouraged” workers or people who are working part time because they cannot find full-time work. Swings in the. Economic Pendulum . Instability in the . Growth . of Real . GDP: 1960-2015. Although real GDP in the . United States has . grown at an average rate of approximately 3%, the growth has been characterized by economic ups-and-downs. H. ossein. . a. bdoh. . t. abrizi. June 6, 2015. www.finance.ir. Macroeconomic environment of . iran. Current stagflation situation in Iran. High inflation rate and high volatility. Low GDP per capita growth. Chapter 21. McGraw-Hill/Irwin. Copyright © . 2015 . by . McGraw-Hill Education (Asia). . All rights reserved.. Learning Objectives. Identify the four phases of the business cycle and explain the primary characteristics of recessions and expansions. Editor, . Review of Keynesian Economics. Full Professor, . Laurentian University. IAEN conference – Quito (Ecuador). July 26-28, 2017. Has it been fifty years already?. Some preliminary thoughts on Friedman (1968) [and Phelps]. Chapter 21. McGraw-Hill/Irwin. Copyright © . 2015 . by . McGraw-Hill Education (Asia). . All rights reserved.. Learning Objectives. Identify the four phases of the business cycle and explain the primary characteristics of recessions and expansions. Orange Group. This is chapter . 35. !!. The natural rate of unemployment depends on various features of the labor market.. Examples include minimum-wage laws, the market power of unions, the role of efficiency wages, and the effectiveness of job search.. Click on the letter choices to test your understanding. Question 1. The labor force is:. Try again!. The sum of all people employed is employment. This is a measure of the proportion of the country’s working age population that is employed.. Money and Inflation. Rise in money supply does not equal a rise in Real GDP in the long run, since price level rises as well by the same percentage. Classical Model of Price Level . – Since money supply and price level rise together, the Real Quantity of Money (M/P) stays at the original level.