Reading Assignment for Exam #2

Chapters 24 (497 - 500) -Inflation Analysis (19, 21PE) (20, 32, 31TR)

Chapter 26 - Business Cycles, Unemployment, and Inflation (21,22 PE) (20, 32, 31TR)

Chapter 25 Economic Growth (20PE) (23TR)

Chapter 27 - Basic Macroeconomic Relationships ( 19, 24, 25, 26)PE) ( 20,32,31 TR)

Chapter 28 - The Aggregate Demand - Aggregate Supply Model (22TR)

It seems that every day of the week, a government agency will announce a statistic describing

the health of the US economy. These most common statistics include the level of GDP (Gross Domestic Output), unemployment rates, inflation rates, budget deficits (or surpluses), imports/exports, and industrial production to name a few.

Economists use these statistics to measure the health of the economy in the same way that doctors measure various vital signs - blood pressure, heart rates, blood sugar content, height, weight, etc to measure the health of a person.

In this section, you will learn about:

Recessions;

1. how they are measured, who measures them, and their frequency

Unemployment;

1. how are unemployment rates calculated

2. are they different ways to measure unemployment

3. is there a correlation between the business cycle and unemployment rates

Inflation;

1. different ways to measure inflation

2. price indices

3. nominal and real dollars

Basic Macroeconomic Building Blocks

1. you will begin building an economy

2. you will examine how each sector of the economy affects a different sector

3. you will use algebra to graph the different positions of the economy under different circumstances