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UNEMPLOYMENT RATE, MEASUREMENT PROBLEMS: The official unemployment rate, which measures the proportion of the civilian labor force 16 years or older that is not engaged productive activities but is actively seeking employment, is estimated and reported monthly by the U.S. Department of Labor's Bureau of Labor Statistics (BLS). The imperfections of official unemployment rate fall into two categories. One that suggests the "true" unemployment of labor resources is likely greater than the official unemployment rate and the other that suggests the "true" unemployment of labor resources is likely less than the official unemployment rate. Two items that show up in the understated category are discouraged workers and part-time workers. Two items that shows up in the overstated category are unreported legal employment and unreported illegal employment.

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Lesson 16: Aggregate Shocks | Unit 3: Basic Shifts Page: 7 of 21

Topic: AD Shifts <=PAGE BACK | PAGE NEXT=>

There are two directions that the aggregate demand curve can shift:
  • An increase in aggregate demand is a rightward shift of the AD curve.
  • A decrease in aggregate demand is a leftward shift of the AD curve.

And we have the AD curve shifting in two versions of the aggregate market, long run and short run.

This gives us four basic curve-shifting alternatives:

  • An increase, with the long-run aggregate market.
  • A decrease, with the long-run aggregate market.
  • An increase, with the short-run aggregate market.
  • A decrease, with the short-run aggregate market.

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INVESTMENT BORROWING

The acquisition of funds through the financial markets by the business sector which are used to finance investment expenditures on capital goods. In terms of the simple circular flow model, this is one of two basic demands for household saving diverted into financial markets. The other is government borrowing.

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Today, you are likely to spend a great deal of time at a flea market trying to buy either a 200-foot blue garden hose or a video camera with stop action features. Be on the lookout for letters from the Internal Revenue Service.
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The New York Stock Exchange was established by a group of investors in New York City in 1817 under a buttonwood tree at the end of a little road named Wall Street.
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