Macroeconomics

Good Essays
Chapter 1: The Science of Macroeconomics

Macroeconomics is the study of the economy as a whole. It addresses many topical issues which includes growth in incomes, changes in the overall level of prices, and the unemployment rate. Macroeconomists attempt to explain the economy and to devise policies to improve its performance.

Economists use different models to examine different issues. Macroeconomic events and performance arise from many microeconomic transactions, so macroeconomics uses many of the tools of microeconomics.

Economic models are simplified versions of a more complex reality. Irrelevant details are stripped away. Example of a model is the supply and demand for new cars, the model shows how various events affect price and quantity of cars and it assumes that the market is competitive: each buyer and seller is too small to affect the market price.

No one model can address all the issues the people care about. The supply-demand model of the car market can tell how a fall in aggregate income affects price & quantity of cars. And cannot tell why aggregate income falls.

Endogenous and exogenous variables are used to show relationships between variables explain the economy’s behavior devise policies to improve economic performance.

Models with flexible prices describe the economy in the long run; models with sticky prices describe economy in the short run.

Chapter 2: The Data of Macroeconomics

Gross Domestic Product (GDP) measures both total income and total expenditure on the economy’s output of goods & services. Nominal GDP values output at current prices; real GDP values output at constant prices. Changes in output affect both measures, but changes in prices only affect nominal GDP.

GDP is the sum of consumption, investment, government purchases, and net exports. Consupmtion the value of all goods and services bought by households. It includes durable goods, nondurable goods, and services. Investment is spending on [the

You May Also Find These Documents Helpful

  • Satisfactory Essays

    macroeconomic

    • 1026 Words
    • 5 Pages

    Macroeconomic study of deal not with individual but aggregate of these quantities not with individual incomes but nation incomes not with individual output but with the nation output Macroeconomic as two policies which are; Financial or monetary macroeconomic policies: The government can make the balance of how money can be supply. The money can be supply in three term which are: OMO- Open Market Operation Reserve requirement Interest Rate OMO can supply money into the bank through…

    • 1026 Words
    • 5 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Macroeconomics

    • 1765 Words
    • 12 Pages

    Macroeconomic Analysis and Policy Session-1 SessionBiswa Swarup Misra Macroeconomic Analysis and Policy PDF created with pdfFactory Pro trial version www.pdffactory.com Biswa Swarup Misra Learning Objectives • What is Macroeconomics? • Macroeconomics vs. Microeconomics • Why Study Macroeconomics? • Influential macroeconomic events • Macro Economic Policy • Key Macroeconomic Variables Macroeconomic Analysis and Policy PDF created with pdfFactory Pro trial version www.pdffactory.com Biswa Swarup…

    • 1765 Words
    • 12 Pages
    Satisfactory Essays
  • Satisfactory Essays

    macroeconomics

    • 263 Words
    • 2 Pages

    Macroeconomics Objectives: 1. To deepen and widen students’ understanding of theories and laws that rule the national economies 2. To enhance students’ analytical ability 3. To give a macro-perspective to the economic phenomena around the world 4. To help students better comprehend the domestic and global economic realities and try to predict future course of events References: 1. ‘Economics’ by Paul Samuelson 2. ‘Macroeconomics’ by Dornbusch Fischer 3. ‘Macroeconomics’ by Richard…

    • 263 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Macroeconomics

    • 1416 Words
    • 4 Pages

    What macroeconomic policy prescriptions/strategies would you recommend for Belize in an effort to foster economic growth and development? One characteristic that developing countries’ economies share is vulnerability. Belize is small in size, prone to natural disasters and environmental fragility. Belize also has an open economy with a high trade-GDP ratio, but its export base is very narrow, dominated by primary products (bananas, sugar, citrus, etc.) and natural resources. Therefore, the Belizean…

    • 1416 Words
    • 4 Pages
    Powerful Essays
  • Satisfactory Essays

    MacroEconomics

    • 624 Words
    • 3 Pages

    Macroeconomic Status Neina Gonzalez Chamberlain College of Nursing Principles of Economics ECON-312N Professor Sarah Jenyk August 16, 2014 Macroeconomic Status Introduction This paper will discuss the macroeconomic situation of the United States, including but not limited to unemployment, inflation and recession and the effect of these things on the economy. The Problem…

    • 624 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Macroeconomics

    • 1186 Words
    • 4 Pages

    Available from: http://www.investopedia.com/terms/c/centralbank.asp [Accessed: 21 Oct 2013]. Investopedia (2009) Aggregate Supply & Aggregate Demand - CFA Level 1 | Investopedia. Available from: http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/aggregate-supply-demand.asp [Accessed: 21 Oct 2013]. Milliken, F. (2013) Lexington Libertarian: Spelling It Out: Income Inequality Caused By Quantitative Easing. Available from: http://lexingtonlibertarian.blogspot.com/2013/09/spellin-it-out-income-equality-casued…

    • 1186 Words
    • 4 Pages
    Better Essays
  • Good Essays

    Macroeconomics

    • 786 Words
    • 4 Pages

    Fundamentals of Macroeconomics Part 1 In the United States economy there are several factors that affects its economy; these affects it in a different way; some of this effect are more severe than others. The gross domestic product (GDP), the real, and the nominal (GDP) each causes different effect. There are others factors that affect the United States economy; such as the unemployment rate, the inflation rate, and the interest rate. These results have an effect on the grocery purchasing, the…

    • 786 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Macroeconomics

    • 515 Words
    • 3 Pages

    Macroeconomics | Assignment 1: Demand Illustration | Market Subject- Blueberries Cultivated/ Produced | Price Per Pound ($) | Quantity Demanded Per Year (lbs) | $5.10 | 2 | $4.60 | 3 | $4.10 | 4 | $3.60 | 5 | $3.10 | 6 | Personal Demand: Market Demand: Price Per Pound ($) | Quantity Demanded Per Year(lbs) | $5.10 | 170,000,000 | $4.60 | 180,000,000 | $4.10 | 190,000,000 | $3.60 | 200,000,000 | $3.10 | 210,000,000 | Increase in Demand: Price Per Pound ($) |…

    • 515 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Macroeconomics

    • 12967 Words
    • 52 Pages

    University of the Cordilleras RISING TUITION AND MISCELLANOUS FEES IN HIGHER EDUCATION In partial fulfillment of the requirements in Macroeconomics By: Achawon, Czarina Bantiyaw, Jenny Lou Gahid, Dariel Morales, Jurileen Nacis, Nemiah Salvador, Chaste Heart Santiago, Nikki Tengay, Joseph August 2013 CHAPTER I Background of the Problem During the past years tuition fee has been growing. And for this year, it was the largest increase having 354 private universities and colleges…

    • 12967 Words
    • 52 Pages
    Better Essays
  • Good Essays

    Macroeconomic

    • 685 Words
    • 3 Pages

    A Brief Look at the Adjustment Process The process through which money creation leads to a higher level of prices. Suppose again that the money supply curve shifts, reflecting an increase in the money supply. * If 1/P does not change, there is an excess supply of money. In other words, people find themselves with more money than they need. * Some people will use the extra money to buy more goods and services. This causes the money price of goods P to increase, and the goods price of money…

    • 685 Words
    • 3 Pages
    Good Essays