2 CHRIS!!!!!!!!!!!!!!!!!!!!!

Chris, how could You leave us?? 

In the begining I couldn't  understand the way You were teaching and I think most of the new students were the same. 

But now, after three and a half months we got used to You and Your funny jokes and I am sure everybody will miss You. 

Two good teachers have left us - You and sociology teacher- Mary. And it is not fair.

I think there is no point of going to school anymore, coz it is empty without You.

We will remember only good things about You, for example how You showed FUCK to Fanny or " miss Dong thing" or Mr and Mrs Ken jokes and finally- Team Lisa and Numior.... 

and last but not least- I think everybody will be happy to recieve sometimes economics homework )))). 

With love from economics group and team Lisa.

Chapter 5.

Economic Growth - in short run, an increase in real GDP, in the long run, an increase in productive capacity.

Deflation -  a sustained fall in the general price level.

Balance of Payments - a record of money flows coming in and going out of the country.

Government Policy:

-Economic Growth

-Employment and Unemployment

-Inflation(an increase in price level)

-Balance of Payments(trade)

-Income Redistribution(transfer money from rich to poor)

Hyperinflation - more than 50%

Current Account Deficit - when more money is leaving than receiving.

Stable inflation- 1% or 2%

Unemployment Rate measured by formula:

the unemployment *100% / labour force

Labour Force - people who are employed and unemployed.

UNEMPLOYMENT:

-Cyclical (lack of demand)

-Structural(because of decline of certain industries and occupations due to change on demand and supply)

-Frictional(in between jobs)

Types of Inflation:

-Demand-pull

-Cost-push

AD & AS (chapter 4)

Aggregate Demand- the total demand for a country's goods and services at a given price level and in a given time period.
AD(aggregate demand)
=
Consumer expenditure
+
Investment
+
Government spendings
+
(eXports
-
iMports)

Price Level -  the average of each of the prices of all the products produced in an economy.
Consumer expenditure - spending by households on consumer products.
Government spendings - spendings by the central government and local government on goods and services.
Exports - products go out of the country.
Imports - products go in the country.

Consumer expenditure includes:
-Real Disposable Income (after tax, benefits and inflation)
-Wealth (more people-more spendings)
-Consumer Confidence (how optimistic consumers are about future economic prospects)
-The Rate of Intrest
-The Age Structure Of The Population
-Distribution Of Income (from rich to poor)

-Inflation - rise in price level.

Aggregate Supply - the total amount that producers are willing and able to supply at a given price level in a given time period.

Real GDP- AFTER INFLATION!!!!!


Inflation:


If Demand ShiFts to the left - DEFLATION
If Demand ShiFts to the right - Demand Pull Inflation


If Supply ShiFts to the left- Cost Push Inflation
If Supply Shifts to the right - Economic Growth