00:01
Let's take a look at how aggregate expenditure and consumption are impacted by unemployment insurance payments.
00:06
And we would like to know if these unemployment insurance payments do anything to keep consumption constant throughout the business cycle.
00:14
So within this business cycle, you can see i've grafted for us here.
00:18
We see that it comes and goes.
00:19
We have ebbs and we have flows, prosperity and depression, recession, recovery, peaks, troughs, all of these things that fall along this business cycle.
00:30
Simplified it for us just so that we could understand what consumption does.
00:33
So when we're in a depression, suppose, the economy is not doing so well.
00:38
We fall below this steady growth rate.
00:41
What we're likely to see is that consumption is going to decrease, right? because people aren't going to have as much money or as many assets.
00:49
They're not going to have that financial ability to consume as much as they may be once worse.
00:54
So as a result of this depression and lower incomes and profits, we're going to see consumption reduce...