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Economics - Coggle Diagram

- - - - Compensation of employees: income of workers who work in another country for short periods
  - - - Calculating the production of final goods and services or by adding Value added in each stage of production. For example of a final good: a car and it stage of production: the tyres, the mechanics etc.
    - - Calculating all the income produced in a good or service
    - - Calculating all the expenditure of all the country in goods and services
- - - - Calculating deflation and inflation
        
        Difficulties of measuring
        
        The survey:
        People can make mistakes
        The surveyor could not represent the whole population
        The prices changes does not effect the same to everyone
        
        The basket of goods and services:
        The basket can change people purchases, so the basket has to change
        takes time to include and to remove old products
        
        Base year: difficulty to select the base year
        
        CPI: weight times the percentage of price change
        
        Price change: using the calculate of inflation rate
        
        weight: the expenditure of the categorie divided the base expenditure which always is 100. If the expenditure of the product is 25%, then thecalculation is 25 divided 100.
        
        Money values and real data
        
        Money Value: Values at the prices operating at the time
        Real data: data adjusted for inflation
        
        to convert Money value to Real data we have to mutiplided, for example the wage of a worker with the price index divided by the base year.For example, a worker wage change from 5000 to 6000, and the price index changed from 100 to 125. So the calculation is 6000 x 125/100= 4800
      - Causes and consequences of deflation
        
        defaltion may: Increase burden debt, increase the real rate of interest and result in menu costs
        
        Good deflation:
        increase in Aggregate supply
        Bad deflation:
        a fall in aggregate demand
  - - - In some occasions can be both , for example, when the there is a fall in a country's foreign exchange. There will be an increase of the price in imported raw material (cost push) and increase export revenue (demand pull)
  - - - The cause of inflation
        the rate of inflation
        The rate of inflation is accelerating or stable
        If the rate of inflation was expected
        The comparison of rate of inflation with other countries
- - - - Discourage workers: People who decided stop to looking a job
    - - Unemployment rate: Number of people unemployed divided number of people of the labour force. Everything multiplied 100
  - - - Voluntary: The worker decides to leave the job or not accept one due to not enough payment, bad working conditions. etc
        Seasonal: Jobs are in different seasons (winter, summer, etc) An example is the snowboard teacher.
        Search unemployment: People who refuse the first job offer due to looking for a better job
        Casual Unemployment: People who are out of working between periods, for example, actors
    - - Regional: Works declining in a specific area of the country for example gold mining
        Technological: Workers are substituted by technology
        International: The country losses its competitiveness in a product or products
- - - - Price index of the current year= GDP deflator
  - - - An increase of production of BOTH goods: Capital goods and Consumer goods
        However, the economy has to use the new productive capacity to lead it to an economic growth. if not, there could be a recession in GDP
        
        Recession: decline of GDP over at least two consequitive quarters
  - - - Move resources from the production of consumer goods to capital goods in short term. There will be less consumption of products
        
        Difficult to workers to change their job as some business are expanding and others declining
        Workers being more stressed and there will be more working hours for workers and pressure
        Damage to environment
    - - Increase goods and services, this can raise people's living standars
        Easier to help poor people
        Rise of employment
        Could increase business and consumer confidence, which encourages to investment
- - - - Diagram in the book
    - - Diagram
  - - - Desequilibrium
        
        More leakages, more spending, income falls
        
        More injections, more investment, income rise
      - Equilibrium: injections= leakages
- - - - why the demand changes?
        
        The demand will decrease due to the increasing of prices
        In an international context, if the price is high there will be less exports that imports.
        Rising of prices, more demand of money so, a higher interest rate
  - - - Why could change?
        
        Prices of products increase, however, the prices of factor of productions doesn't. Producers will earn more money, more profit. The SRAS will increase.
        Production increases and the costs of productions stays the same. However, the price will increase as extra costs will have to be covered (more raw materials, more workers, etc)
        Misinterpretation of producers. As they are thinking that they are becoming popular by the increasing of sells, they rise the price.
        
        Shifts in the SRAS curve
        
        Increase of the price of factors of production, and the price of the product stays the same. So the producers are obliged to produce less. the curve moves to the left
        Reduction of taxes, more production, the curve moves to the right
        A change in the quality of resources will move the curve to the right or left depending on the efficiency of machinery and workers, better or worse
        Drastic changes, for example, natural disasters may move the curve to the left.
    - - Keynes
        
        GDP increases and there is no change in the price. At some point there will be a maximum of production using all the resources, however, the price can still change. The product is elastic, however, at some point it transform into inelastic
      - New classical economists
        
        They think that the industries must produced at the maximum.
        In the short run the AD will increase so the AS also. However in the long run the cost of production will increase. This obliged the producers to rise the price and decrease the production. The production is the same but the price increases
      - Changes of the curve
        
        Quantity:
        Migration= more labour force
        More women working
        Net investment
        Discovery of new resources
        new creation of land (ocean), land reclamation
        
        Quality:
        Advances of technology
        Improved education and training (new skill, better skills)