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Economics 1 - Coggle Diagram
Economics 1
CPI(Biuro of Labor and Statistics)
Other Economic Indicators: Inflation (CPI) Unemployment, GDP
Unemployment Rate = #of unemployed ppl / #of ppl in the Labor Force x(100)
-Types of Unemployment-
Frictional: People in-between jobs (Temporary) ex. quitting, fired
Structural: Changes in the Industry. ex human labor replaced by machines
Cyclical: people loose their jobs, don't have money to spend to keep the economy growing, business loose demand because of less spending. The Government has to get involved to stop this. THIS IS THE MOST SEVERE.
Seasonal: people who don't have work because of the changing seasons. this include part time jobs like ski teachers or gardeners.
Labor Force: Who is Included/Not Included?
Included: people who receive paychecks from a working salary, those looking for employment
Not Included: people who are not looking for employment, undocumented workers, kids, stay at home parents, retired people
Recession - 2 consecutive downwards quarters of the GDP
Deflation - the price of goods and services go down when they have to go down. There is not enough demand for them to keep prices the same. APEALING TO BUYERS
Leads to a downward spiral of conservative to low spending because IF NO ONE IS SPENDING, PRODUCTION IS ALTERED TO BE LESS-->LAYOFF-->LESS SPENDING.
Inflation - cost of goods and service goes up. Purchasing power goes down.
Purchasing Power
Hyperinflation - increasing 50% price of goods and services in a month. THIS DESTORYS PURCHASING POWER
Those with fixed incomes or hourly wage, those who live on savings(not receiving a check) are affected by inflation.
Inflation is increased at a normal rate of 2-3% every year. Paychecks accommodate for this inflation when one works on a salary
GDP: Growth Domestic Product
GDP per Capita: GDP of Nation / Population
Nominal GDP: The GDP that is viewed at currently, NOT TAKING INTO ACCOUNT INFLATION
Real GDP: The GDP that IS MEASURING INFLATION.
Standard of Living: The wealth or the comfort people are able to live by. Those who have a high standard of living are able to spend more and still feel financially stable. MEUASURED BY GDP PER CAPITA
Growth = real GDP rising, Contraction = real GDP falling
Business Cycle