450

Z
Ze

I
2 ,

2 450
m)
202y(10(x
-

Za

201 m) 22 = 160 + 0 9X .

+0x6(X
-

2,
= 160+ 0 84 .

203
Y or GDP 23
=
160 + 0 . 1X

43 Y: Ye

Y
Y3 Y2 Y
177
.
788001600

Multiplier Effect

Y
Ls =
housholds
Lo =
firms
Pr =

wage
W

GDP

QSL

& Du

W
Sh

Wi

We

DL
 Total Population

Is
& above
yes
economically economically
Below IS
yes
non-institutionalized active institutionalized
inactive
Civillian military/non civilliam

Labor Force not

willing
-
willingness
and N/ 2) and / or

not able to work

capability

retirees
students

employed unemployed disabled

housewife

under employed
Types ofemployment
Labor force
LFPR frictional
economically temporary state
= -

active

ER =
employed x 100
Structural -

loss in demand for

Labor force
certain skills

Cyclical deficient-demand UF
unemployed
-

VER = x 100 caused decrease

Labor force by a

in
spending

underemployed +100
Under EMPRO
employed

(Arthurs) Okuss Law

shows the relationship between the

UE Rate and the GDP Gap
 Inflation
-sustained and
general increase in prices in all
all markets
or
nearly

Hyperinflation
-overstated inflation

Price Index
an average of
commodity prices in relation to their

prices in a
specified Base
year

GDP/GNP Deflator a .
k a . .
GDP/GNP Index

Producers Price Index (finished , intermediate and new

goods)
Consumer PriceIndex (mere than 400 consumer goods and services)

Inflation Effects

Losers Gainers
·

fixed-salary employees
·

flexible income earners with market power

·
Retirees with fixed pensions
·
Speculators
Creditors
· ·
Debtors
Suvers
·

Inflation types
Demand-Pull Cost-Push
-when
buyers of final goods caused by significant and continued
and services desire to costs of production
purchase increases in some

quantities of output greater than

what the can
produce
economy
Inflation and
Unemployment
Philipps Crue-shows the inverse relationship between inflation rate
and US Rate

· ·
·
functions
medium of
unit of Value
of

exchange
Money

· store of value

Legal Tender
·

Unemployment
Economic Definition of
Money
in circulation
currency
·

·
checks
debt
money
·
as

Ms Msz Msz Ms

Xiz
,
i

iz ud i ma
Qu
MsX -
it -
IN -
Y Ms -

14 -
Iy -

M Transaction
,
Money Demand
in circulationa How banks create
currency money
=

peposits
(w/o printing new money)
Time
M2 M fractional
Account system
·

+
Savings
=
+ reserve
peposits
,

Primary
·
tool : reserve requirement
or-percentage/portion of a
·

M3 = Wat loo paper issued by the total

commercial bank's deposits
bank that funds that kept
generate must be in-value
The rest has to be loomed .
out

My :
My +
peso equivalent of all dollar
deposits of residents
 Ms A is I * YA
Monetary Policy : -

1) Bry/Sells FOREX
2) Buy/selling of governmentSecurities (Bonds)

kB's
Buy
BSP Gov't
#
KB's
7
open
market
operation
(Omo)
~
Repurchase
Agreement

3) rrt =
Mst

4) Rediscounting Rate
-

i of loans KB's
of

Redis ↑
CB KB's

Ms

Economic Growth : % AGDP

Do We Demand for
Why Money ?
Transaction Demand
·

Demand
·

Precautionary
·

Speculative Deman