Macroecnomics

1. Overview of the Modern Macroeconomy 1.1 Essential Structure (1)
Scarcity in Resources  Choice = Decision Making = Tradeoff Market/Price Mechanism  Exchange = Swap = Transaction = Trading
Factor Demanders (Employers)

Micro Partial Equilibrium  Macro General Equilibrium

Factor Markets
Labor etc. Wage etc.

Factor Suppliers (Employees)

Production Cost Firms

(Labor) Income Intervention by Policy and Regulation Government
Transfer Income Tax

Subsidy Sales Tax

Households

Intertemporal Financial System [Markets + Institutions]
Funds Demanders (Investors/Borrowers)  Funds Suppliers (Savers/Lenders)
Real Sector Flows Money Sector Flows

Sales Revenue
Goods Suppliers (Producers) q = f (L, K, M, T, E) Transformation

Expenditure Product/Service

Consumption Budget
Goods Demanders (Consumers) U = f (q1, q2, …) Transformation

Goods Markets

Macroeconomics U1: Blanchard Chs. 1~2, 27

1. Overview of the Modern Macroeconomy 1.1 Essential Structure (2) Atemporal Transaction in Goods or Factor Markets Supplier/Seller  Receive
Goods or Factors Money Payments

Demander/Buyer  Pay

Intertemporal Transaction in the Financial System NOW: Issuing Security = Debt Contract = Claim = Financial Instrument
Real Asset [Capital/Fixed/Direct Investment]  Financial Asset [Financial Investment]

Fund Supplier Lender/Saver/Creditor/F.I. Security Demander/Investor

Funds Security

Fund Demander Borrower/Debtor/C.I. Security Supplier/Issuer

FUTURE = Maturity [Term to Maturity or TTM]
Fund Supplier Lender/Saver/Creditor/F.I. Security Demander/Investor Funds + YLD Security Fund Demander Borrower/Debtor/C.I. Security Supplier/Issuer

Macroeconomics U1: Blanchard Chs. 1~2, 27

Macroeconomics [1] by C-J Huang

1

1. Overview of the Modern Macroeconomy 1.2 Key Indicators (1)

• Key Indicator (1): GDP  GNP Y Aggregate [Total] Output Measured in National Income and … Accounts
Nationality  Residence Domestic Foreign Domestic A