Econ 252: Chapter 12 Notes
Econ 252: Chapter 12 Notes ECON 252
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This 1 page Class Notes was uploaded by Zach Weinkauf on Sunday April 10, 2016. The Class Notes belongs to ECON 252 at Purdue University taught by Andres Vargas in Fall 2016. Since its upload, it has received 58 views. For similar materials see Macroeconomics in Economcs at Purdue University.
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Date Created: 04/10/16
Chapter 12: Short-Run Fluctuations 12.1 – Economic Fluctuations and Business Cycles Economics Fluctuations/Business Cycle – short-run changes in the growth of GDP. o Co Movement of many aggregate macroeconomic variables o Limited Predictability of Fluctuations. o Persistence in the Rate of Economic Growth. Economic Expansions – periods between recessions. Great Depression – started 1929. Depression – prolonged recession with an unemployment rate of 20 percent or more. 12.2 – Macroeconomic Equilibrium and Economic Fluctuations Sources of fluctuation: o Real Business Cycle Theory – emphasizes changing productivity and technology. o Keynesian Theory – changing expectations about the future. o Financial and Monetary Theories – emphasize change in prices and interest rates. Animal Spirits – psychological factors that lead to changes in the mood of consumers or businesses. Self-Fulfilling Prophecy – situation when expectations of an event induce actions that lead to that event.
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