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Economics Chapter 6 - Coggle Diagram

- - - - increase in QQT ( increase output then increase NY, increase GDP thus eg)
        
        Increases in productive capacity increases the level of output available which then increases the ny then gdp then lead to eg
    - - Short run : Affects actual growth (ad/as diagram)
      - Long run : provides incentives to invest in improving productive capacity (tech)
    - - when got a social political and cultural environment that ppl like then they will have incentives to work harder
    - - other countries poor = cannot sell exports to
  - - - increased consumption
      - can afford to care for environment
    - - environmental impacts and depletion of non renewable resources
      - can affect employment
- - - - leads to downwards spiral of falling incomes, falling demand, falling prices,falling investments and falling employment and output
- - - - AD increases which causes the general price level to increase
    - - increase in COP which leads to producers raising the price. (upwards shift in SRAS )
  - - - Firms will be uncertain of price of fop and their outputs
        (rate of returns will be uncertain, risk of investment increases)
      - Consumers might also invest in non capital equipment but choose to purchase non-productive wealth to hedge inflation
        
        Leads to a fall in AD and can affect long run as rate of capital accumulation is reduced and thus growth in productive capacity decreases
      - MILD investments can lead to an INCREASE in rate of returns of investments
        (leads to high outputs and employments)
    - - decreases as exports as now more expensive in other countries
    - - Decrease purchasing power
        
        affects lower income ppl more as now they have to work harder to maintain sol
        
        their incomes also doesnt increase as much with inflation ( retired people living on gov fund)
        
        Increase income inequality
- - - - When people change jobs and just enter job force, there is a period of time they are looking but cant find a job
        
        Results of imperfect info (job seekers dk wat is the best job for him)
    - - When there is mismatch of skills of jobseekers and job vacancies due to change in structure of economy(or they not at the right place to take the job)
        
        Change in pattern of Demand
        
        Changing tastes and preferences or goods going out of fashion
        
        Change in Aggregate conditions of Supply
        
        technological unemployment (replaced by more efficient robots)
    - - caused by deficiency of effective demand
        
        eg in recession low ad, low output, not many workers required. workers get laid off
    - - unemployment due to seasons fluctuation
        
        weather/tradtions and customs
    - - When minimum wages are higher than market level, there will be surplus
  - - - when got unemployment, there is lower productivity and lower output
      - Long run : ppl leave the labor market cause lose motivation to find job
    - - no job = no income tax, no job = spend less = less gst, no job = more money on unemployment benefits
    - - lower unemployment = lower crime