Reading for Homework: Oxford Text: pgs. 210-214 (Just read about Cyclical, Frictional, Seasonal, and Structural unemployment) or
December 5
Low unemployment
The meaning of unemployment
Consequences of unemployment
Types and causes of unemployment
Reading for Homework: Oxford Text: 221-232 or
December 9
Low and stable rate of inflation
The meaning of inflation, disinflation and deflation.
Consequences of inflation
Consequences of deflation
Types and causes of inflation
Reading for Homework: Oxford Text: 244-249 or
December 11
Economic Growth
The meaning of economic growth
Causes of economic growth
Consequences of economic growth
Reading for Homework: Oxford text: 250-258 (skip high level sections) or
December 13
Equity in the distribution of income
The meaning of equity in the distribution of income
Indicators of income equity/inequity
Poverty
The role of taxation in promoting equity
Other measures to promote equity
The relationship between equity and efficiency
Reading for Homework: pgs. 250-258
December 17
Equity in the distribution of income
The meaning of equity in the distribution of income
Indicators of income equity/inequity
Poverty
The role of taxation in promoting equity
Other measures to promote equity
The relationship between equity and efficiency
December 19
TEST #6
Macroeconomic objectives
Homework:
TEST QUESTIONS Full Employment
(a) Explain the difficulties involved in measuring the level of unemployment.
(a) Distinguish between structural unemployment and cyclical(demand-deficient) unemployment.
(b) Examine the reasons why the maintenance of a low level of unemployment is considered to be an important macroeconomic objective.
Low and Stable Inflation
(a) Explain the difficulties involved in measuring the rate of inflation.
(a) Using AD/AS diagrams, explain how inflation may be caused by demand pull and cost push factors.
(a) Explain how a producer price index could be useful in predicting future inflation.
(b) Evaluate the view that a low and stable rate of inflation is beneficial for an economy.
(b) Evaluate the view that the consequences of deflation are likely to be more harmful to an economy than the consequences of inflation.
(b) Discuss the view that deflation will always be bad for an economy.
High Economic Growth
(a) Explain the causes of economic growth in terms of an increase in actual output and an increase in potential output.
(b) Discuss the view that the consequences of economic growth are always beneficial.
(a) Explain the role of improved productivity in achieving economic growth.
(b) Discuss the view that economic growth can only be achieved at the expense of other macroeconomic objectives such as a low and stable rate of inflation and equity in the distribution of income.
Equity in the Distribution of Income
(a) Explain how a government could bring about a more equal distribution of income.
(b) Evaluate government policies to promote equity in terms of their effects on efficiency in the allocation of resources.