Simple Economic Models of GDP, Prices, and Employment
What Economists Do
A Very Simple Model of GDP
A Robinson Crusoe Economy
Crusoe’s Production Function
Robinson Crusoe’s Production Function
Diminishing Returns
Production Possibilities Frontier
Robinson Crusoe’s Production Possibilities Frontier
Investment
Real GDP
An Increase in Capital Raises Production Opportunities
An Increase in Capital Shifts Crusoe’s PPF
Changes in GDP
A Model with Trade
Labor Markets
Labor Markets and Real GDP
Equilibrium Employment and Real GDP
Money
Circular Flow
Circular Flow of Economic Activity
The Equation of Exchange
Neutrality of Money
Equilibrium Employment and Unemployment
Causes of Unemployment
Equilibrium Unemployment
Determinants of Equilibrium Unemployment
What If the Economy Lacks Enough Jobs
Automation
Cyclical Unemployment
Simple Economic Models of GDP, Prices, and Employment End of Chapter 6
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