一、Basic Concept.
1.Relationship between household and film
2.General Domestic Product(GDP)
幾點需要注意：
1: It represents the final market value.
2: All services and goods in the market.
3: in only one country.
4: in a period of time (a year)
不能算作GDP的情況，如1900年的古董今年再售賣，只能算1900年的GDP不能算是2018年的。(因為古董是在1900年生產(chǎn)的)
3. Nominal GDP=current price * current quantity
Real GDP=base year price * current quantity
4. Price index (價格指數(shù))
Consumer price index (消費者價格指數(shù)): measures changes in the price level of a market basket of consumer goods and services purchased by households.
(Overestimate the true burden of inflation because it does not recognize consumers’ ability to substitute goods and services as price change. (選擇題考過))
Producer price index(生產(chǎn)者價格指數(shù))：the average changes in prices received by domestic producers for their output.
5. GDP deflator=(Nominal GDP/Real GDP)*100
RGDP> NGDP: Deflation
RGDP
6.Business Cycle(選擇題考過)
7. Main Reasons for economic growth(?？?，幾乎選擇題必考):
More resources
Higher level of education
Increase technology/productivity
Methods to improve Human Capital:
Education/Training
Better skills
8. Disposable income=personal income-tax
9. Consumption=autonomous consumption + derived consumption
autonomous consumption: consumption expenditure that occurs when income levels are zero.
derived consumption：Consumption for a factor of production or intermediate good occurs as a result of the consumption for another intermediate or final good.
10.Nominal interest rate-Inflation=Real interest rate(常考)
二、Three main theory:
1. Monetarist(很少考)：increasing the money supply at a rate equal to the GDP increase rate.
2. Classical(比較?？?，答題也有出，關(guān)鍵詞：Government take no actions): emphasize economy is fairly stable(強調(diào)市場內(nèi)在穩(wěn)定)，can cure the recession; and no government intervention(沒有政府介入); Flexible market.
3. Keynesians(常考): emphasize that economy is unstable. (Sticky market); Recommend active government policy. (fiscal policy is more effective than monetary policy); Liquidity trap
Example for classical theory:
When economy is in a Recession, there is a surplus of workers or inputs, the wage and the cost will decrease
AS curve will shift to the right for get equilibrium level. (沒有政府介入，市場自動恢復(fù))
三、Crowding out and Stagflation(常考)
Crowding out effect:通常指政府的開支增加導(dǎo)致的私人投資和消費減少。
通常思路是：GS(government spending)increase Demand for loanable fund increase real interest rate increase people tend to save money in the banks rather than use it to invest, so that investment and consumption decrease, AD shift to left.反之亦然。
Stagflation:跟理性預(yù)期很像。
邏輯是：When AD curve shift to right, price level increase
people are expecting a higher price level
so producers tend to save products rather than sell it since they are waiting for a higher price level which can make more profit for them.
四、Unemployment(選擇題必考)
1. 計算方法：失業(yè)人口/總勞動力
失業(yè)人口指：
1.People have ability to work but do not have job.
2.People who is finding new job.
不是失業(yè)人口的情況：Tony在一個志愿者中心無薪工作，期間拒絕一切工作的offer，這種情況Tony不能算是勞動力。
2. FOUR kinds of unemployment;
1. Frictional unemployment:摩擦性失業(yè)，A person switches to a new job.可以理解為跳槽期間的空檔時間。
2. Structural unemployment:結(jié)構(gòu)性失業(yè)， A kind of skill is being replaced by machines, therefore there is no requirement for this kind of skill-worker anymore. (技術(shù)不再被市場需求)
3. Cyclical unemployment:周期性事業(yè)， A person was being unemployed since the economic change, such as recession or depression.
4. Seasonal unemployment:季節(jié)性失業(yè)，A person was unemployed since the seasonal change.
Dishonest workers: 不是失業(yè)人口卻拿補助金的人。會導(dǎo)致unemployment rate 上升。
Natural unemployment rate：around 5%, only in structural unemployment and frictional unemployment.
5. Discourage workers: People who do not want to find job, and will not account for labor force.
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