New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

ECN 150: Week 15 Notes

by: Alexis Ibarra

ECN 150: Week 15 Notes ECN 150

Marketplace > La Salle University > Economcs > ECN 150 > ECN 150 Week 15 Notes
Alexis Ibarra
La Salle
GPA 3.89

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Week 15 notes of intro to macroeconomics
Francis Thomas Mallon
Class Notes
Economics, Macroeconomics
25 ?




Popular in Macroeconomics

Popular in Economcs

This 4 page Class Notes was uploaded by Alexis Ibarra on Friday May 6, 2016. The Class Notes belongs to ECN 150 at La Salle University taught by Francis Thomas Mallon in Summer 2015. Since its upload, it has received 9 views. For similar materials see Macroeconomics in Economcs at La Salle University.


Reviews for ECN 150: Week 15 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 05/06/16
WEEK 15 NOTES              5/2/16  At AD1, high unemployment, inadequate GDP growth  Fiscal Policy says for government to increase spending or decrease taxation  This increases national debt! taxrevenues −Governmentspending ¿deficit>¿surplus  If the nation experiences a deficit that year, debt is expanding. Surplus that year, debt  decreases.   If there is a deficit, we borrow money! Other countries give us money because our  interest rates that we get away with paying are ridiculously low!  At AD2, Our deficit is now less, we now have full employment but debt is continuing to increase  So we want a surplus!! So we want to increase tax revenues and decrease government  spending. BUT this could potentially cause a contraction in the graph. GDP growth could slow or stop and unemployment could rise!  If a President did this, he would not get re­elected.  For government to buy bonds from people, they need money! Where do they get it? They sell more bonds to other people and use the cash to buy bonds from those who wish to  cash theirs in. When is this a problem? When others don’t want to buy bonds! 1  Unemployment vs inflation graph (Phillip’s Curve) : It used to be taught that if inflation was  high, unemployment was low. If inflation was low, unemployment was high. But then we  found ourselves at high unemployment and high inflation at the same time! How can this be?  Stagflation. 5/4/16  Stagflation: high unemployment and high inflation at the same time!  Spending can no longer be used to fix this!!  Expanding spending=lowers unemployment, but inflation increases.   Contrast spending= lowers inflation, but unemployment increases.  This didn’t make sense according to the Keynesian method   People realized that the Keynesian method had a fixed aggregate supply. They thought, what  if the aggregate supply wasn’t fixed? Why is it fixed? Because government has so many  restrictions! If the government backs off then the aggregate supply could grow.   So government needs to fix the progressive tax structure.  Progressive Tax Structure: Those who earn a higher level of income, pay a higher  percentage of tax on that income than those who earn lower levels of income.  Income Income Tax Rate 0­20k 0% 20k­100k 15% 100k­250k 22% 250k­450k 28% 450k­up 35%  Lowering the income tax rate will allow aggregate supply to increase. Unemployment  and inflation lowered!! Stagflation was fixed.  2  However, now, the real estate market crashes! Now what?...  Some people (Classicals) said we should just let it play out and fix itself.  Or we could go back to the Keynesian methodology and try Stimulative Policy Action.  The right action depends on the situation!  Lorenz Curve: Analyzes how the income of a society is being allocated among the members of that society.   Absolute equality: 20% of the people earn 20% of the income, 40% of the people earn  40% of the income, etc. (Represented by a diagonal line on the Lorenz curve).   The first 20% people earn 4% of the income, the next 20% people earn 10% of the  income, the next 20% people earned 15%, and the last 1% of people earn 35% on the  income... (see Lorenz curve graph)  The difference between the absolute equality line and the curve is the degree of deviation. The further the curve is from the 45 line, the more diverse it is. The closer the curve is to  the 45 line it is, the less diverse it is from being equitable.   Minimum Wage: The minimum amount of money that an unskilled worker can be paid.  3     Unskilled Labor  W1 and Q1 is without government intervention  W2 and Q2 is with government intervention and minimum wage. Now the people between Q2 and Q1 have lost their job.   This causes degree of deviation to increase! (bad) 4


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Kyle Maynard Purdue

"When you're taking detailed notes and trying to help everyone else out in the class, it really helps you learn and understand the I made $280 on my first study guide!"

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.