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INTRODUCTION - Coggle Diagram
INTRODUCTION
Key Variable
the agregate price level
employment & unemployment
interest rates
wage rates
foreign exchange rates
Factors that determine level of variables that change over time
the rate growth of output
inflation rate
changing unemployment-expansion/recession
changing in FDI-appreciation/depreciation
INFLATION
The inflation rate computed percentage rate of change in the price index over a given period.
Price index-measure of the aggregate price level relative to a chosen base year
Consumer price index- a measure of the retail prices of a fixed "market basket" purchased by household
Disinflation-decline the inflation rate
ALFRED MARSHALL
examines part of individual and social action
closely connected with attainment & use material requisites
Study ordinary business of life in the aggregate
OUTPUT
real gross domestic product (GDP)
GDP measures current production of goods and services
real means that measures have been corrected forbprice changes.
US FEDERAL budget and Trade Deficits
large federal budget deficits
skyrocketing foreign rate deficit
INFLATION & UNEMPLOYMENT
NEGATIVE RELATIONSHIP