Sunday, January 23, 2011

Post 25

Part 1

One group of Americans that would love inflation would be fast food restaurant owners and workers. When there is a period of increased inflation, the average American's purchasing power is less than what it was before inflation. When your purchasing power is not as strong, you can not splurge on things as much such as expensive dinners or luxurious activities. Fast food is a cheeper alternative than going to an expensive restaurant. These owners will actually be more profitable in a time of inflation.


3 Groups of Americans Facing Poverty:

1.  Native Americans
2.  Mentally Ill
3.  Inner City Minorities

The best group of Americans to donate money to would be the Native Americans. For us to have built the great and powerful nation that is now the United States of America, we had to relocate the native Americans. Since being relocated, the native Americans have always lived in impoverished conditions. They are some of the poorest people in the country and could no doubt use aid. Northern Students should donate money to one of the many native American reservations to help them live a more enjoyable life. Either direct aid or money to help send some of their children to college would help them greatly.

Post 24: Unemployment Scenarios

Frictional Unemployment:

My name is Joe. I have been working for a major corporation in Philadelphia for a year. I recently resigned because I was offered a higher and more satisfying job in NYC. I am currently frictionally unemployed.

Structural Unemployment:

My name is Joe. I went to college for a four year degree and ended up with a masters after 6 years. My degree was an MBA in business administration. Since there is not a high enough demand for high level business administrators, I am structurally unemployed.

Cyclical Unemployment:

My name is Joe. I have worked for an electric company for the past 10 years. I was recently laid off because the economy is going through a recession and the need for electric workers has decreased. I am cyclically unemployed.

Seasonal Unemployment:

My name is Joe. I have worked on a farm with my friends every summer for the past 5 years. I pick grapes from vines and apples from trees. Since it is now the winter time there are no apples or grapes to be picked so I am seasonally unemployed.

Post 23: Wanted Poster

Post 22: Quiz Facts

Quiz 1:

1.  The ideal percentage of the population to be part of the labor force is 95%.
2.  If you are not employed or unemployed, you are not in the labor force.
3.  If you are working in a job which is below your skill level, you are underemployed.
4.  Agricultural workers are affected by seasonal unemployment.
5.  The unemployment rate is the most closely watched and highly publicized labor force statistic.

Quiz 2:

1.  As the value of the dollar decreases, so does the purchasing power of people on fixed incomes.
2.  A supply shock is an event that increases the cost of production for all or many firms.
3.  The worst degree of inflation is called hyperinflation.
4.  High interest rates leads to less consumer spending.
5.  Aggregate supply is the total amount is the total amount of goods and services produced through the economy.

Quiz 3:

1.  A way to improve the income equality is by raising the minimum wage.
2.  The income gap between Americans was more diverse in the 1990's than at any other time since World War II.
3.  The poverty theshold is the lowest income level that a family needs to maintain a basic standard of living.
4.  Poverty thresholds are adjusted annually based on changes in the consumer price index.
5.  The data used to ploy a Lorenz Curve can also be used to compute the Gini index.

Post 21: Vocab

Gross Domestic Product- Total value of all final goods and services produced within a country in a given year.

Output Expenditure Model- A method of computing the GDP by adding the total value of consumer and government spending.

Personal Consumption Expenditure- Total spending by consumers for durable goods, nondurable goods, and services during a specified period of time. 

National Income Accounting- Process used for tracking production, income, and consumption in a nations economy.

Gross Investment- Total value of private spending in the economy for capital assets.

Nominal GDP- The value of a nations GDP at the current prices of the period being measured. 

Real GDP- The value of a nations GDP after it has been adjusted for inflation.

Price Index- A set of statistics that allows economists to compare prices over time.

Underground Economy- Illegal economic activities or unreported legal activities that are not accounted for in national income measures.

Gross National Product- Total value of all final goods and services produced with factors of production owned by citizens of a different country. 

Business Cycle- A recurring pattern in economic activity that is characterized by alternating periods of expansion and contraction.

Expansion- A period of the business cycle during which economic activity is increasing toward a peak.
Peak-The point of the business cycle during which employment production and wages are at their highest. 

Contraction- A period in the business cycle during which business activity slows down and overall economic indicators decline.

Recession- Substantial and general decline in over all business activity over a signifigant period of time.

Depression- A prolonged and severe recession.
Trough-The lowest point of the business cycle.

Leading Indicators- Set of economic factors that anticipate the expansions and contractions of the business cycle from one month up to two years before similar changes in overall economic activity occur. 

Coincident Indicators- Set of economic factors that move up or down with the economy.

Lagging Indicators- Set of economic factors that help economicts predict the duration of economic up or downturns. 

Real GDP Per Capita-The monetary value adjusted for inflation of all final goods and services produced  per person  in an economy in a given year.

Labor Productivity- Measure of how much each worker produces in a given period of time.

Productivity Growth- Increase in output per worker per hour worked. 

Capitol-to-labor- ratio- Amount of capital resources available per worker.

Capital Deepening- The increasing of capital resources at a faster rate than the increasing of the labor force.

Thursday, January 20, 2011

Post 17: Business Cycle Charts

Graph 1:
Strengths:  Colors to represent different scenarios and arrows to represent patterns.

Weakensses:  No examples to relate to and very general terms.

Graph 2:

Strengths:  Pictures to show examples of situations and many terms to show the flow of the cycle.

Weaknesses:  Not in depth and does leave out some possible terms that could be useful.

Chart 3:
Strengths:  Color coated with terms and important points to show trends in the business cycle. The key is numbered and very easy to navigate. Also an unrelated strength is that it includes the colors of the Minnesota Vikings which is a big strength.

Weaknesses:  May be confusing between the two flows, some information could be mixed up if read incorrectly.

And the winner is.......


This chart is by far the best representation of the business cycle. Its color coding and easily accessible key make it both comprehensible and visually appealing. All major points along with other helpful information is included, yet not jumbled together. Yet the other charts have their own value, this one sets itself apart from the rest. This would be extremely helpful to use on the economics midterm. 

Monday, January 17, 2011

Post 18: Twitter Man


This resource has a very large supply of terms and concepts that we have been using over the course of semester. Not only is this site easy to use but also very informing and has terms that give you the information you need without excess useless information; it is to the point.

This resource is particularly helpful because of its search feature. On the midterm especially, where there is a time limit for how long you have to take the exam, this search bar is extremely efficient and effective. These terms are just as useful as the terms in the first site, but the search feature makes them easier to access. They can both be used hand in hand.

Shmoop is an extremely effective and student friendly tool. It features all of the major topics we have learned about in the economics course and also covers some topics even further. The topics are separated into easy to navigate sections and labeled along with pictures, making it as simple as can be. 

Tuesday, January 4, 2011

Post 15: Economic Indicators

Leading Indicators:

1.  Building Permits
2.  Unemployment Insurance Claims
3.  Stock Prices

These indicators forshadow what is going to happen to the overall economy. For example if stock prices are falling, the economy usually goes throught a downturn or even a recession like today.

Coincident Indicators:

1.  Non-Agricultural Employment
2.  Personal Income
3.  Industrial Production

These indicators show how the economy is doing in its current state. For example, if personal income is higher overall, the economy is in a stronger state.

Lagging Indicators:

1.  Average Duration of Unemployment
2.  Average Prime Rate charged by banks
3.  The value of outstanding commercial and industrial loans

These indicators show patterns in the economy and can predict how and economy will do. For example, if the value of outstanding loans is lessening, the economy will most likely get better because businesses are making more profit to pay off loans.

Monday, January 3, 2011

Post 14: Reaction to Video

"My Humps" was an interesting video to say the least. The same goes for the business cycle rap. They both took humorous approaches in order to teach about the topic of business cycles. The quicki on the other hand took a more serious and direct approach which caught my attention more. I feel like I got the most out of the quicki even though it was so short. Another video that I found helpful was called Business Cycle on youtube. It is a lot more serious and includes a lot of facts that are essential to a business cycle.

Business Cycle Part 1

Sunday, January 2, 2011

Post 13: 10 Things I Learned

1.  The process macroeconomists use to track production, income, and consumption is known as national income accounting and provides information about a country's economic activities.

2.  The most widely used NIPA is gross domestic product.

3.  To actually compute GDP, economists use the output-expenditure model.

4.  Personal consumption expenditures include durable goods, nondurable goods, and services.

5.  Gross investment is the total value of all capital goods produced in a given country in one year as well as changes in the dollar value of business inventories.

6.  Government transfer payments are not included when calculating government purchases.

7.  A price index is a set of statistics that allows economists to compare price over time.

8.  Illegal activities and unreported legal activities are part of the underground economy.

9.  Barter transactions, housework, and do-it-yourself home repairs are examples of non-market activities.

10. Indirect taxes are taxes included in the final price of goods and services.

Post 12: Letter to Editor

Dear Editor,

GDP is not an accurate way to measure a country's success. It includes everything a country produces and the wealth of the nation but not every aspect of the country. For example it does not include aspects about other countries that may help another country and territories and other things. A much more accurate measure would be GNP. GNP measures a countries wealth plus it's expenditures which makes it more accurate.

Post 11: 4x3 technique

1. Add spending of private money.
2. Add government Spending.
3. Add the difference between imports and exports.

1. Citizen Spending
2. Government Spending
3. Import Spending
4. Export Profits