Econ. 101 Week 3
Econ. 101 Week 3 ECN 101
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Ray Parker Jr.
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This 2 page Class Notes was uploaded by Sydney on Sunday September 18, 2016. The Class Notes belongs to ECN 101 at Saint Martin's University taught by Riley R. Moore in Fall 2016. Since its upload, it has received 7 views. For similar materials see Principles of Economics in Economics at Saint Martin's University.
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Date Created: 09/18/16
Week 3 9/12 Macroeconomic goals growth jobs/employment Stable prices The way that how a country is doing economically before 1980 was to look how the country was doing itself. Now look at the economy and how it relates to the rest of the world. GDP = C + I + G + X CConsumption (household, private sector) (Current) GNP (Previous) IInvestment (Businesses) GGovernment (public sector) XNet exports (exportsimports=net) To measure economies, have to include everything How would you compare across countries? 1931During great depression, US had negative growth, operating inefficiently New way to measure Price x Quantity= Value. ↳ Can compare without physical items Equation is susceptible to inflation because if price goes up quickly will look like positive sales, even if less people are buying. Karl Marx Opposite ideas of Adam Smith 1864 Used Darwin's idea to say Economies can evolve. Capitalism was an old and broken system. Socialism was the final form. In US late 1800’s so much prosperity Socialism ideas did not catch on. No need for central “gov’t to control economy. 1913 Creation of IRS & FED → Bank revised (way to borrow money) (Ways for Gov’t ↳Internal revenue (Taxes) To make money) Depression Private sector imploded. Banks collapsed → no loans → Businesses laid people off→ People didn’t spend money Marx gained footing because empowered the unemployed. Desired gov’t to take care of them John Maynard Keynes 1936 saved market gov’t from being thrown out. Thought the way to pull US from depression was to have huge explosion in private sector, make gov’t part of the equation and employ people (public works) to get economy going again. “You are only unemployed if actively seeking work” Extreme Middle ground Extreme Karl Marx John Maynard Keynes Adam Smith Gov’t should own private Gov’t should step in during Laissez Faire barely any sector, everyone is seen as economic depressions to gov’t involvement, only act as equal revive private sector referee. Depression No real definition. Prolonged recession Recession 2 quarters of downward GDP. Does not take in account employment rate “Technology has put downward pressure on labor” ↱ Cyclical When economy goes down, good employees get laid off ↗SeasonalOccupations might only employ part of the year f ishing, farming Unemployment → Fictional People in between jobs, never 0% unemployment ↳Structural Something occurs usually Gov’t policy that puts people out of Work. animal endangerment act put loggers out of a job. Businesses structuresDifferent legal systems sole proprietorship easiest way to “own businesses” measure what is going on and proxy for what's going on in economy. Biggest force for bankruptcyMedical bills Trying to change GDP to take out “bad things” that make money. cancer natural disasters. Add in good things, but who gets to decided? GDP is gross, might go up but maybe not for a good reason Small businessUnder 500 people ↳ make up 80% of businesses. when looking at employment statisticsare they full time? seasonal? City governments Will move mountains trying to accommodate large private businesses because they bring in jobs. Rules made for large businesses.
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