Prove that lim x l3 V "4x !5#!7

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. 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.