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Apr 15
1. Business cycles: Economies experience periods of expansion and contraction, known as business cycles, which are characterized by fluctuations in economic activity such as GDP growth, employment levels, and inflation.
2. Phillips curve: There is an inverse relationship between inflation and unemployment, known as the Phillips curve. When inflation is low, unemployment tends to be high, and vice versa.
3. Okun's law: There is a negative relationship between changes in unemployment and changes in GDP growth. This means that when unemployment decreases, GDP growth tends to increase, and vice versa.
4. The Solow growth model: This model suggests that long-term economic growth is driven by technological progress and capital accumulation. It emphasizes the importance of productivity growth in sustaining economic growth over time.
5. The Lucas critique: This concept highlights the limitations of using historical data to make predictions about future economic outcomes. It argues that economic policies should be based on structural economic models rather than historical relationships.
6. The Mundell-Fleming model: This model explains the relationship between exchange rates, interest rates, and fiscal and monetary policy in an open economy. It highlights the trade-offs policymakers face when trying to achieve multiple policy objectives simultaneously.
7. The quantity theory of money: This theory posits that changes in the money supply have a direct impact on the price level in an economy. It forms the basis for understanding the relationship between money supply, inflation, and economic growth.
2. Phillips curve: There is an inverse relationship between inflation and unemployment, known as the Phillips curve. When inflation is low, unemployment tends to be high, and vice versa.
3. Okun's law: There is a negative relationship between changes in unemployment and changes in GDP growth. This means that when unemployment decreases, GDP growth tends to increase, and vice versa.
4. The Solow growth model: This model suggests that long-term economic growth is driven by technological progress and capital accumulation. It emphasizes the importance of productivity growth in sustaining economic growth over time.
5. The Lucas critique: This concept highlights the limitations of using historical data to make predictions about future economic outcomes. It argues that economic policies should be based on structural economic models rather than historical relationships.
6. The Mundell-Fleming model: This model explains the relationship between exchange rates, interest rates, and fiscal and monetary policy in an open economy. It highlights the trade-offs policymakers face when trying to achieve multiple policy objectives simultaneously.
7. The quantity theory of money: This theory posits that changes in the money supply have a direct impact on the price level in an economy. It forms the basis for understanding the relationship between money supply, inflation, and economic growth.
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