Recessions seem to show up every so often and create economic hardship. One might think that macroeconomic policymakers could tame the business cycle and implement policies that would end recessions. Are recessions a necessary fact of macroeconomic life? If not, what would it take to eliminate them? If they are unavoidable, what types of business can benefit from them?
How would a recession affect your firm (or a firm you are familiar with)? Please be specific.
2. One point about how the unemployment rate is calculated can be misleading, with one factor being the discouraged worker. From the Bureau of Labor Statistics, they define discouraged workers. In another discussion, I mentioned my father who lost his senior management job and worked part time for a few years because no one would hire him (no one wanted a 60+ year old senior manager. He went from temporary job to temporary job but nothing long term.
Discouraged workers are a subset of the marginally attached. Discouraged workers report they are not currently looking for work for one of the following types of reasons:
· They believe no job is available to them in their line of work or area.
· They had previously been unable to find work.
· They lack the necessary schooling, training, skills, or experience.
· Employers think they are too young or too old, or
· They face some other type of discrimination.
https://www.bls.gov/cps/cps_htgm.htm
3. One concept that we need to understand before we can proceed in macroeconomics is Aggregate Demand. This is just a review of the concept and a chance to discuss for our own edification. After reading the chapter and below, why is Aggregate Demand fundamental to understanding - hint, is has to do with what makes the economy stop or start. In other words, who are the economic decision makers, what do they need to know, and how can they try to effect a change?
Aggregate demand is the total amount of goods and services demanded in the economy at an overall given price level within a given time period. It is represented by the aggregate-demand curve, which describes the relationship between price levels and the quantity of output that companies are willing to provide. Aggregate demand is the demand for the gross domestic product (GDP) of a country (2014, Investopedia).
Aggregate Demand (AD) = C + I + G + (X-M) C = Consumers' expenditures on goods and services. I = Investment spending by companies on capital goods. G = Government expenditures on publicly provided goods and services. X = Exports of goods and services. M = Imports of goods and services.
https://www.investopedia.com/terms/a/aggregatedemand.asp