Macro Economic

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SAU LECTURE NOTE ON ECO 213 INTRODUCTION TO MACROECONOMICS I

COURSE OUTLINE

1. Nature and scope of macroeconomics

• Macroeconomics defined

• Why study macroeconomic

• Macroeconomic theories

• Relationship and interdependency of microeconomics and macroeconomics

• Drawbacks of macroeconomics

2. National income accounting

• Definitions

• Concepts associated with national income

• Methods of measuring national income

• Rationales of national income analysis

• Obstacles to national income measurement

• Circular flow of income (two sector economy)

3. Macroeconomic theories

• Classical economics: ideologies

• Keynesian economics: ideologies

• Monetarism: ideologies

• New Classical economics: ideologies

4. Unemployment

• Types of unemployment

• Unemployment in Nigeria

• Policy measures towards reducing unemployment

5. Inflation and deflation

• Meaning

• Types

• Causes

• Inflation unemployment relationship

• Inflation in Nigeria

• Measures to control inflation

6. Exchange rate

• Meaning

• Types

• Factors that affects exchange rate of a country

7. Interest rate

• Types of interest rate

• Interest rate and inflation

Recommended textbooks

➢ Macroeconomic theory by M.L Jhingan, 12th Edition

➢ Economic by David Beggs, latest Edition

➢ Macroeconomic by N George Mankiw, 4th Edition

NATURE AND SCOPE OF MACROECONOMICS

Macroeconomic Concepts: Macroeconomics is the study of the economy as a whole. Macroeconomics is the study of economic aggregates or averages, examines and attempting to understand the behaviour of the whole economy by analyzing the determination and interaction of such broad economic aggregates, the interrelations of the aggregates among various aggregates, their determination and causes of their fluctuations. In particular, it looks at output, income, and the interrelationships among sectors of the economy. It is the study of the factors that influence, and result from, the large scale functions of economies. It is the way economists measure the behavior and functioning of economies. To do this, economists quantify aspects of the economic process using economic aggregates, or averages — measurements such as the Gross National Product, unemployment, and inflation consumers' expenditures and savings, producers' output of products and producers' investment in capital, government revenues (taxes) and expenditures, exports and imports, the level and composition (by age, sex, and region) of employment, and the quantity of money in circulation. Issues involving the overall economic performance of the nation: • Do people find it easy or difficult to find jobs?

• On average, are prices rising quickly, slowly, or not at all? • How much total income is the nation producing per year, and how rapidly is total income growing? • Is the interest rate charged to borrow money high or low? Rising or falling? • Is the government spending more than it collects in tax revenue? • Is the nation as a whole accumulating assets in other countries or is it becoming more indebted to them? • What level is the country’s currency? Will it rise or fall? • Why do long-term national growth rates differ?

• What are the costs of long-term growth?
These questions are the central macroeconomic concept and providing the answers to these questions is the core task of macroeconomics. Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy...
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