MacroEconomics

Public Policy
PIDE

Lecture Dated 17/3/2020

 Outline
• Supply and Demand
• Price Controls
• Quantity Controls
• Measuring the Economic Performance
– Circular Flow of Economic Activities
– GDP; Real & Nominal
• Unemployment
• Inflation
Supply and Demand
Price Control-Min Wage Floor
Price Controls-Max Price of Rice
Measuring Economic Performance-Circular
Flow
Measuring Economic Performance-Circular
Flow
GDP; Real and Nominal
GDP; Real and Nominal
GDP; Real and Nominal
 Unemployment-Definition
• They aren't working, even part-time or
temporary.
• They are available to work.
• They actively looked for work in the past four
weeks.
• Unemployment rate= unemployed/laborforce
• Labor force; number of people either actively
employed or unemployed
Unemployment-Types
 Other types of Unemployment
• Cyclical Unemployment
• Frictional Unemployment
• Structural Unemployment
• Natural Unemployment
• Long-Term Unemployment
• Real Unemployment
• Seasonal Unemployment
• Classical Unemployment
• Underemployment
Causes of Unemployment
 Inflation-Def
• Increase in Prices over a base period
Inflation-Types
 Assignment-Calculate, plot and Comment. Submit
word file at mahmood.khalid@pide.org.pk by March
20th. Plagiarism will be checked and no extensions

• Calculate Per Capita GDP (i.e. GDP/Population) of

Pakistan for last five years and compare with one
other country (USE WDI data).
• Calculate Real GDP per capita for the same data as
above
• Plot unemployment and inflation rate of Pakistan
and the second country which u choose for the
above task for last five years