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Economics (Economic system (How will we produce it, Who gets it, What will…

- - - - machines & factories & infrastucture
      - Human capital -- workers' knowledge & skills
- - - - Include People looking for a job actively
      - Discouraged Workers :Unemployed people who were looking for a job but have given up
      - Underemployed 不充分就业 e.g. A worker with a five hour a week part time job is considered fully employed.
      - Three types of unemployment
        
        Natural rate of unemployment : The lowest rate of unemployment that a country can sustain over a long period
        
        :check:Frictional Unemployment : The time period whne a worker is searching for, or transitioning from one to another
        
        :check:Structural Unemployment : Unemployment caused by lack of demand for a worker's specific type of labor
        
        :red_cross:Cyclical Unemployment : Unemployment due to a recession
    - - Business Cycle : The process of booms and busts of economy
      - Inflation is measured by trakcing the prices of a set amount of commonly purchased items
    - - Nominal GDP: Gross Domestic Product not adjusted for inflation
        Real GDP: GDP adjusted for inflation
      - Recession :When two successive quarters, or six months, show a decrease in real GDP
      - Four making-up components
        
        Government spending
        
        Cosumer spending
        
        Net exports
        
        Business spending
    - - Contractionary fiscal policy (紧缩性财政政策) : enacted by a government to reduce the money supply and ultimately the spending in a country
      - Expansionary fiscal policy (扩张性财政政策) : stimulates the economy during or in anticipation of a business-cycle contraction --- confront with a deep recessionary gap (衰退缺口)
      - Deficit Spending (财政赤字) : The government spending more money than it collects in tax revenue
      - Corwding Out (挤出效应) : Where increasd public sector spending replaces, or drives down, private sector spending -------- (keynesian economists maintaining) only a problem in fully operated economy
      - Austerity : Rising taxes and cutting government sending to reduce debt
      - Multiplier effect (乘数效应): ripple effect -- initial spending of $100 may turn out to be $175 in the economy called a multiplier of 1.75
        
        e.g. walfare & unemployment the hignest -- low income people are more likely to spend all their additional income infrastructure & aid & local governments 1.5X multiplier cuts to payroll & income taxes 1X multiplier
        
        strong economy 1X multiplier recession 2X multiplier