Sunday, December 12, 2010
I shall revise my Macro Econs here! :D
Topic 1 : Circulation flow of Income.
I only know need rmb about
INJECTIONS and withdrawals.
and the diagram thingy.
Injections got Export revenue, Invesment and Gov Expendit.
Withdrawals got savings, net taxes & import expenses
Topic 2:GDP
3 approach to measure.
Income, Expenditure, Output.
Expenditure= C+i+G+NX
Income = Wages + profit +interest + rent
Output =Value added of goods producing industries + services producting industries.
Nominal vs Real gdp
Nominal = Current period, with current prices
Real = current period, with base year prices.
Real GDP= (Nominal GDP/GDP DEFLATOR) x100
GDP shortcoming = underground economy & non market transaction,
GNP = GDP + income from abroad - income to abroad.
Economic growth = Real GDP(NEW) - Real GDP(old)/ REAL GDP(OLD) x100
Real GDP Per capita = Real GDP/POPULATION SIZE
Topic 3&4: AD & AS analysis
LRAS = At output country can produce at full employment ( 1 vertical line)
SRAS= shows relationship btwn real gdp supplied & price level in short run
3 factors that affect LRAS
Qty of labour
Qty of Capital
State of technology
IF LRAS SHIFTs, SRAS MUST shift in the same direction. Because it indirectly affect SRAS.
2 factor that affect SRAS
Money wage rate or other raw material prices ( Cost of production)
AD = C+I+G+NX
AD = downwards sloping
3 Macro Equilibrium
below full (RECESSIONARY GAP)
full (POTENTIAL OUTPUT)
above ful (INFLATIONARY GAP)
topic 5: INFLATION & UNEMPLOYMENT
INFLATION RATE = CPI(NEW)- (OLD)/ CPI OLD x 100
CAUSES = DEMAND PULL & COST Push
DEMANDPULL = AD increase , so P increase Y and increase
further effects = Shortage of labour, money wage rate go up, cost of production go up, SRAS FALL, shift left
P increase further and Y decrease back.
Cost push = SRAS shift due to cost of production
If SRAS shift left, P go up, Y go down.
Recesson + inflation = stagflation.
labour market indicators
Labour force = employ + unemployed
Unemploy= aged 15+, avail for work,and are actively looking for.
Unemploy rate = unemployed / labour force x 100
Labour force participation = Labour force/ Working age population x100
3 types of unemployment
FRICTIONAL, STRUCTURAL, = ALL THE TIME HAVE
Cyclical = INCREASE DURING RECESSION
Frictional = moving accross jobs
structural = Mismatch of skills
Cyclical = Retrenchment
Causes of unemployment
AD FALL or SRAS FALL
Short-Run Philips curve
shows trade of between inflation & unemployment rate.
country cannot have the best of both. must choose 1
LR Philips curve = vertical str7 line at natural rate of employment.
TOPIC 6: FISCAL POLICY! (LAST )
Govt use of Taxes and expenditure to achieve certain macroecons policies.
Automatic fiscal stabliser
-> reduce the extend of recessonary gap or inflationary gap.
During recession, income falls, ppl claim more welfare benefits, tax go down as they fall in lower income bracket, and tis will slow down fall in AD TO REAL GDP.
During expansion, income rises, ppl claim lesser welfare benefits, tax go up as they fall in higher income bracket, tis will slow the rise in C and AD.
expansionary fiscal policy to close recession gaps.
Increase G or decrease T
to increase AD, as C will increase if T drops.
Contractionary fiscal policy
Decrease G or increase T
to decrease AD as, c will drop if T increase.
Limitations is
recognition , policymaking and impact lag.
DONE!!!
My story, My life.
8:26 PM
Thursday, December 09, 2010
Mid sem test is 3days from today.
Had my basic calculus test today.
i was totally so shock and .... zzz
anyway hope i do well.
cos i never been studying!
Shall start soon!
Oh ya i joined TPCG!
Hope i can play more rounds.
not 1st round out!
My story, My life.
10:04 PM
