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The unemployment rate
- fraction of the labor force that wants work but does not currently have a job.
- Why has unemployment in Europe been twice as high as unemployment in the USA in the past two decades?
- Which region had higher unemployment in 1960, the USA or Europe?
- Why does Japan have such low unemployment?
The inflation rate
- rate at which prices are increasing in an economy.
- What determines the rate of inflation?
- What determines the price level and how quickly prices rise?
- Why was inflation so high in the 1970s
- How and why did inflation start falling so
- dramatically in the 1980s?
Government Policy
- Government use of policy to direct or stabilize the economy
- fiscal policy
- monetary policy
Budget deficit
- government borrows money to finance spending.
- occurs if (Government spending) > (Tax revenues)
Trade deficits
- Occur when one economy borrows from another.
- This happens on an international level.