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ABSTRACTION METHODS: Abstraction is the process of simplifying the complexities of the real world by ignoring (hopefully) unimportant details, especially (for our purposes) while doing economic analysis. Three common methods of actual, real world abstraction used in economic theories are words, graphs, and equations. Words can be misunderstood. Graphs are a little more precise. And equations tend to be the most precise of the three.
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Lesson 16: Aggregate Shocks | Unit 1: Instability
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Page: 3 of 21
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- The aggregate market as a tool to analyze the macroeconomy and its adjustments toward equilibrium.
- How aggregate market adjustments are important to the difference between short-run equilibrium and long-run equilibrium.
- That the aggregate market curves--AD, LRAS, and SRAS--are constructed assuming other (ceteris paribus) things remain unchanged.
- Ceteris paribus determinants as the source of business cycle fluctuations away from the long-run, full employment growth trend of the economy.
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CYCLICAL UNEMPLOYMENT Unemployment attributable to a general decline in macroeconomic activity, especially expenditures on gross domestic product, that occurs during a business-cycle contraction. When the economy dips into a contraction, or recession, aggregate demand declines, so less output is produced and fewer workers and other resources are employed. Hence unemployment of the cyclical variety increases. Cyclical unemployment is one of four unemployment sources. The other three are seasonal unemployment, frictional unemployment, and structural unemployment.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store seeking to buy either a wall poster commemorating the 2000 Olympics or a flower arrangement with a lot of roses for your grandmother. Be on the lookout for infected paper cuts.
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This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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ARIMA
Autoregressive Integrated Moving Average
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