ECON 1012 Week 2
ECON 1012 Week 2 ECON 1012
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This 1 page Class Notes was uploaded by Jaimee Kidd on Sunday September 25, 2016. The Class Notes belongs to ECON 1012 at George Washington University taught by Roberto M. Samaniego in Fall 2016. Since its upload, it has received 5 views. For similar materials see Principles of Economics II (ECON 1012) in Economics at George Washington University.
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Date Created: 09/25/16
ECON 1012 Week 2 Producer Price Index (PPI) • Total of what is being sold à measured the first time it leaves a factory door • Similar to CPI, but different because some things are made that aren’t for consumers, or people consume products from other countries • Important because it was the first time something was prices o First sign of future inflation Labor Market Aggregates • Ex. Unemployment Rate = # of unemployed (no job and looking) / # of unemployed + # of employed X 100 o No job, not looking does not equal unemployed § This means discouraged workers à looking, looking, looking couldn’t find anything and gave up o This leads to a misconception in unemployment, when discouraged workers become encouraged, unemployment rate goes up (just to point out not to read too far into unemployment rates on a weekly or monthly basis) *GDP can also be measured by the total income generated by production in the USA Why is there economic growth & why is there a business cycle? Production Function INPUT à PRODUCTION FIRM à OUTPUT • Input = intermediates, labor (2/3 of GDP), land, and capital • Production Firm = technology (science, engineering, management, institutions) • Output = Real GDP If there is economic growth then at least one of the following must be true: (1) There must be more and more inputs over time (2) There must be more and more productive technologies
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