Exchange Rates and the BOP

FINALLY: EXCHANGE RATES AND THE BALANCE OF PAYMENTS!!!!!!!!!!!!!! Okay- final bit, and then we can all write our exams and promptly forget everything we ever needed to know about economics! =D What is a balance of payments? It's a summary account of...

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Trade Policy

This chapter looks at the policies which either facilitate or impede free trade in the world! As economists, we usually are in favor of free trade. We recognize that free trade offers many benefits to different countries! Why is free trade a good idea?-The...

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Gains from International Trade

OKAY! Let's talk turkey about international trade. Over time, while world GDP had been increasing at a fairly constant rate, world trade has increased exponentially! Canada is, itself, involved in quite a bit of international trade (we export and...

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Unemployment

Okay- I'm really behind in these online notes, but I'm going to catch up as much as I possibly can tonight. Unemployment is scary stuff! Here we go! CHANGES IN UNEMPLOYMENT:-In the long run, increases in the labor force should be matched by changes...

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More Irritating Details About Inflation

The Phillips Curve & Accelerating Inflation -We know what the Phillips curve is. I'm not explaining it again.-At Y* and U*, there is no gap inflation-When the economy is in an inflationary gap, the BoC must validate for wage inflation-In the 1960s,...

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Demand Shocks and Accelerating Inflation

INFLATIONARY DEMAND SHOCKS AND INFLATION-An increase in consumption, investment, government expenditures, and net exports causes an increase in aggregate expenditure, a rightward shift in aggregate demand, and an increase in the equilibrium price level. IF...

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Inflation and Supply Shocks

FROM WAGE CHANGES TO PRICE CHANGES -If a change in money wages is positive (wages increase), short run aggregate supply will decrease (it shifts to the left due to increased costs). This causes prices to rise, and the overall effect is inflationary-If...

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