Econ 2105, Week 3 Pt. 1
Econ 2105, Week 3 Pt. 1 ECON 2105 080
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This 3 page Class Notes was uploaded by Hagar Notetaker on Wednesday September 7, 2016. The Class Notes belongs to ECON 2105 080 at Georgia State University taught by in Summer 2016. Since its upload, it has received 36 views. For similar materials see PRINCIPLES OF MACROECONOMICS in Economics at Georgia State University.
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Date Created: 09/07/16
ECON 2105 9/7/16 Chp. 6: Ending & Chp. 7 Shortcomings of GDP Doesn’t account for… 1. Non Marketable Goods Goods & services produced but never sold Washing dishes, mowing lawn, etc. Less developed societies where houses produce own good, GDP is poor measure of economic output 2. Underground Economic activity Hidden, uncounted transactions, usually settles in cash Legal o Waitress tip, landscapers cut lawn Illegal o Drug Deals Size of underground economy? 10% of GDP in US 45% in developing countries 3. GDP unable to distinguish how goods are produced Country A 10 mill. units w/ output Clean energy, clean air Equal GDP Country B 10 mill. units output No environment standards 4. Leisure Doesn’t capture how long it takes to produce goods & services Avg Work/Week South Korea: 46 hrs/Week Netherlands: 28 hrs/Week US: 36 hr/week Japan: 36 hr/week Other measurements of Econ wellbeing Human Development Indicators Life expectancy Education levels Access to welfare Crime rates Environmental quality ECON 2105 9/7/16 Reality Alternative measures different to quantify GDP correlated with most of these measures anyway CHP.7: Unemployment (P1) Misconception o Policy makers should try to eliminate all unemployment Impractical & o Unemployment always bad for econ Draining of Economy o Optimal for the unemployment to be brought to 0 Occurs when worker is searching for job without success People leave jobs for many reasons o Voluntary unemployment o Involuntary unemployment Usually by machines b/c faster & Types of unemployment easier 1. Structural Unemployment Caused by change in industrial makeup of economy Creative destruction Intro to new tech 2. Frictional unemployment Unemployment caused by time delays in available jobs & employees People don’t instantly get new jobs Firms don’t always hire 1 applicant Gov’t policies Unemployment insurance 1. Benefits worker by reducing consequences of being laid off 2. Helps macroecon by stopping econ problems from spreading to other industries Unintended consequences? 1. Reduces incentives to quickly find another job 3. Cyclical Unemployment Caused by econ downturns “Worst” kind of unemployment ECON 2105 9/7/16 Unknown period of time Root is unhealthy economy
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