INTRODUCTION TO MACRO ECONOMICS. Zoubida SAMLAL - MBA, CFA Member, PHD candidate for HBS program
|
|
- Adela Holland
- 6 years ago
- Views:
Transcription
1 INTRODUCTION TO MACRO ECONOMICS Zoubida SAMLAL - MBA, CFA Member, PHD candidate for HBS program
2 ECONOMICS Why do people study economics? Many study it because they hope to make money. Some worry that they will be considered illiterate if they cannot understand the difference between supply and demand. Others are interested in learning how computers and the information revolution are shaping our society or why the inequality in the distribution of income has risen so sharply in recent years.
3 ECONOMICS The study of how the forces of supply and demand allocate scarce resources. Subdivided into microeconomics, which examines the behavior of firms, consumers and the role of government; and macroeconomics, which looks at inflation, unemployment, industrial production, and the role of government.
4 ECONOMICS MICRO-ECONOMICS MACRO-ECONOMICS
5 MACRO-ECONOMICS Macroeconomics is a branch of economics that deals with the performance,structure, and behavior of a national or regional economy as a whole.
6 USES OF MACRO-ECONOMICS The study of macroeconomics is imp as it tell us how the economy as a whole works. We cannot understanding or derive the laws governing macroeconomic variables such as national income total employment general price level by studding micro-eco decision of consumers firms and industries. What is true in case of an individual firm or industry may not be true for the economy as a whole
7 MACROECONOMIC CONCERNS Three of the major concerns of macroeconomics are Output growth Unemployment Inflation and deflation
8 MACROECONOMIC CONCERNS Output Growth business cycle The cycle of short-term ups and downs in the economy. aggregate output The total quantity of goods and services produced in an economy in a given period. recession A period during which aggregate output declines. Conventionally, a period in which aggregate output declines for two consecutive quarters. depression A prolonged and deep recession.
9 MACROECONOMIC CONCERNS Output Growth expansion or boom The period in the business cycle from a trough up to a peak during which output and employment grow. contraction, recession, or slump The period in the business cycle from a peak down to a trough during which output and employment fall.
10 MACROECONOMIC CONCERNS Output Growth FIGURE 5.1 A Typical Business Cycle In this business cycle, the economy is expanding as it moves through point A from the trough to the peak. When the economy moves from a peak down to a trough, through point B, the economy is in recession.
11 MACROECONOMIC CONCERNS Unemployment unemployment rate The percentage of the labor force that is unemployed. Inflation and Deflation inflation An increase in the overall price level. hyperinflation A period of very rapid increases in the overall price level. deflation A decrease in the overall price level.
12 SUPPLY AND DEMAND Since we are convinced now that trading goods and services makes people better off, the next step is to understand how markets- places or situations in which people interact and trade- are theorized to operate. We ll use the example of gold jewelry to develop a model for demand and supply. The model, in its graphical representation, can also demonstrate how different events can affect the demand and supply for gold jewelry.
13 The Law of Demand Any phonetic resemblance to The Law of The Man is purely a linguistic artifact of the English language. The Law of Demand (aka Theory of Demand) simply states that as prices of things rise, people buy less. This should not be exciting, as you have probably operated according to this law all of your life. Example on the board of individual and market demands
14 Aggregate Demand for Goods & Services Aggregate demand (AD) curve: indicates the various quantities of domestically produced goods and services that purchasers are willing to buy at different price levels. The AD curve slopes downward to the right, indicating an inverse relationship between the amount of goods and services demanded and the price level.
15 Aggregate Demand Curve Price Level P 1 P 2 A reduction in the price level will increase the quantity of goods & services demanded. Y 1 Y 2 AD Goods & Services (real GDP) As illustrated here, when the general price level in the economy declines from P 1 to P 2, the quantity of goods and services purchased will increase from Y 1 to Y 2.
16 Price Level P 1 P 2 A reduction in the price level will increase the quantity of goods & services demanded. Y 1 Y 2 AD Goods & Services (real GDP) Other things constant, a lower price level will increase the wealth of people holding the fixed quantity of money, lead to lower interest rates, and make domestically produced goods cheaper relative to foreign goods. Each of these factors tends to increase the quantity of goods & services purchased at the lower price level.
17 The Law of Supply From the producers perspective, the higher the market price of a good happens to be, the more they re willing to sell. Continue the example on the board of individual and market supplies. Factors that can affect shifts in supply include input prices, technology, expectations, etc
18 Aggregate Supply Curve Price Level economics AS (P 100 ) P 105 P 100 An increase in the price level will increase the quantity supplied in the short run. P 95 Y 1 Y 2 Y 3 Goods & Services (real GDP) The ASC shows the relationship between the price level and the quantity supplied of goods & services by producers.
19 Price Level economics AS (P 100 ) P 105 P 100 An increase in the price level will increase the quantity supplied in the short run. P 95 Y 1 Y 2 Y 3 Goods & Services (real GDP) In the short-run, firms will expand output as the price level increases because higher prices improve profit margins since many components of costs will be temporarily fixed as the result of prior longterm commitments.
20 Components of the Macroeconomy Macroeconomics focuses on four groups. To see the big picture, it is helpful to divide the participants in the economy into four broad groups: (1) households, (2) firms, (3) the government, and (4) the rest of the world.
21 Four Key Markets Coordinate the Circular Flow of Income Goods and Services market Resource market Loanable Funds market Foreign Exchange market
22 Components of Macroeconomy The Three Market Arenas Another way of looking at the ways households, firms, the government, and the rest of the world relate to each other is to consider the markets in which they interact. We divide the markets into three broad arenas: (1) the goods-and-services market, (2) the labor market, and (3) the money (financial) market.
23 The Three Market Arenas Components of the Macroeconomy Goods-and-Services Market Firms supply to the goods-and-services market. Households, the government, and firms demand from this market. Labor Market In this market, households supply labor and firms and the government demand labor.
24 Components of Macroeconomy The Three Market Arenas Money Market Households supply funds to this market in the expectation of earning income in the form of dividends on stocks and interest on bonds. Firms, the government, and the rest of the world also engage in borrowing and lending which is coordinated by financial institutions.
25 Components of Macroeconomy The Three Market Arenas Money Market Treasury bonds, notes, and bills Promissory notes issued by the federal government when it borrows money. corporate bonds Promissory notes issued by firms when they borrow money. shares of stock Financial instruments that give to the holder a share in the firm s ownership and therefore the right to share in the firm s profits. dividends The portion of a firm s profits that the firm pays out each period to its shareholders.
26 All of the following are debt instruments, or promissory notes issued by a borrower, except one. Which one? a. Treasury bonds. b. Treasury notes. c. Treasury bills. d. Corporate Stocks. e. Corporate bonds.
27 27 of 36 All of the following are debt instruments, or promissory notes issued by a borrower, except one. Which one? a. Treasury bonds. b. Treasury notes. c. Treasury bills. d. Corporate Stocks. e. Corporate bonds.
28 Four Key Markets Goods and Services Market: Businesses supply goods & services in exchange for sales revenue. Households, investors, governments, and foreigners (net exports) demand goods. Resource Market: Highly aggregated market where business firms demand resources and households supply labor and other resources in exchange for income.
29 Loanable Funds Market: Coordinates actions of borrowers and lenders. Foreign Exchange Market: Coordinates the actions of Americans that demand foreign currency (in order to buy things abroad) and foreigners that supply foreign currencies in exchange for dollars (so they can buy things from Americans).
30 The Circular Flow Diagram Four key markets coordinate the circular flow of income. The resource market coordinates the actions of businesses demanding resources and households supplying them in exchange for income. The goods & services market coordinates the demand for and supply of domestic production (GDP). The foreign exchange market brings the purchases (imports) from foreigners into balance with the sales (exports plus net inflow of capital) to them. The loanable funds market brings net household saving and the net inflow of foreign capital into balance with the borrowing of businesses and governments.
31 Which of the following statements is correct? a. Macroeconomics examines the behavior of individual industries. b. Both macroeconomics and microeconomics are concerned with the decisions of households and firms. c. Microeconomists look for macroeconomic foundations to explain why most markets arrive at equilibrium. d. All of the above.
32 Which of the following statements is correct? a. Macroeconomics examines the behavior of individual industries. b. Both macroeconomics and microeconomics are concerned with the decisions of households and firms. c. Microeconomists look for macroeconomic foundations to explain why most markets arrive at equilibrium. d. All of the above.
33 For economists, the main measure of how an economy is doing is: a. Aggregate output. b. Aggregate employment. c. The aggregate price level. d. The growth rate of the population.
34 For economists, the main measure of how an economy is doing is: a. Aggregate output. b. Aggregate employment. c. The aggregate price level. d. The growth rate of the population.
35 Components of the Macroeconomy The Role of the Government in the Macroeconomy fiscal policy Government policies concerning taxes and spending. monetary policy The tools used by the Federal Reserve to control the quantity of money, which in turn affects interest rates. 35 of 36
36 A Brief History of Macroeconomics Great Depression The period of severe economic contraction and high unemployment that began in 1929 and continued throughout the 1930s. fine-tuning The phrase used by Walter Heller to refer to the government s role in regulating inflation and unemployment. stagflation A situation of both high inflation and high unemployment. 36 of 36
37 The U.S Economy Since 1970 John Maynard Keynes Much of the framework of modern macroeconomics comes from the works of John Maynard Keynes, whose General Theory of Employment, Interest and Money was published in 1936.
38 CASE STUDY : BUDHIST ECONOMY
Introduction to Macroeconomics. Introduction to Macroeconomics
C H A P T E R 17 Introduction to Macroeconomics Prepared by: Fernando Quijano and Yvonn Quijano Introduction to Macroeconomics Microeconomics examines the behavior of individual decision-making units business
More informationCH 20 Introduction to Macroeconomics. Asst. Prof. Dr. Serdar AYAN
CH 20 Introduction to Macroeconomics Asst. Prof. Dr. Serdar AYAN Introduction to Macroeconomics Microeconomics examines the behavior of individual decision-making units business firms and households. Macroeconomics
More informationChapter 5 Introduction to Macroeconomics
Chapter 5 Introduction to Macroeconomics 1) Which of the following is NOT a topic studied in Macroeconomics? A) gross domestic product B) the unemployment rate C) the price of IBM computers D) the inflation
More informationLecture 22. Aggregate demand and aggregate supply
Lecture 22 Aggregate demand and aggregate supply By the end of this lecture, you should understand: three key facts about short-run economic fluctuations how the economy in the short run differs from the
More informationAggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply Chapter 19 Copyright 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department,
More informationVII. Short-Run Economic Fluctuations
Macroeconomic Theory Lecture Notes VII. Short-Run Economic Fluctuations University of Miami December 1, 2017 1 Outline Business Cycle Facts IS-LM Model AD-AS Model 2 Outline Business Cycle Facts IS-LM
More informationAn Introduction to Basic Macroeconomic Markets
An Introduction to Basic Macroeconomic Markets Full Length Text Part: Macro Only Text Part: 3 Chapter: 9 3 Chapter: 9 To Accompany Economics: Private and Public Choice 13th ed. James Gwartney, Richard
More informationObjectives of Macroeconomics ECO403
Objectives of Macroeconomics ECO403 http//vustudents.ning.com Actual budget The amount spent by the Federal government (to purchase goods and services and for transfer payments) less the amount of tax
More informationCHAPTER 23 Macroeconomics: The Big Picture
CHAPTER 23 Macroeconomics: The Big Picture PowerPoint Slides by Can Erbil 2005 Worth Publishers, all rights reserved What you will learn in this chapter: An overview of macroeconomics, the study of the
More informationKarl Marx and Market Failure
Unit 3 Karl Marx and Market Failure Krugman Module 74 pp. 723-726; Module 76 pp. 743-750; Module 77 pp.754-756; Module 78 pp. 761-770; Module 79 pp. 782-785 Modules 17-19 pp. 172 198 1 Greed is Good. -The
More informationThe aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy.
Chapter 32 The aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy. GDP Deflator can be used as a measure of the price level
More informationdownload instant at
Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The aggregate supply curve 1) A) shows what each producer is willing and able to produce
More informationMacroeconomics CHAPTER 6. Macroeconomics: The Big Picture
Macroeconomics CHAPTER 6 Macroeconomics: The Big Picture PowerPoint Slides by Can Erbil 2006 Worth Publishers, all rights reserved What you will learn in this chapter: An overview of macroeconomics, the
More informationMacro Economics Aggregates and Concepts
Macro Economics Aggregates and Concepts 1 Introduction to MacroEconomics Introduction Economics is divided into two parts (1) Microeconomics examines the behavior of individual decision-making units business
More informationOUTLINE October 11, Behavioral Economics. Example: Risk Aversion. Example: Loss Aversion 10/10/2017 2:56 PM
OUTLINE October 11, 2017 Behavioral Economics Clicker Q s Overview of Macroeconomics Growth of Total Output Unemployment Inflation Models of Macroeconomics Behavioral Economics A very broad overview...
More informationThe Aggregate Demand/Aggregate Supply Model
CHAPTER 27 The Aggregate Demand/Aggregate Supply Model The Theory of Economics... is a method rather than a doctrine, an apparatus of the mind, a technique of thinking which helps its possessor to draw
More informationInstitute of Banking and Finance-Vijayawada / / /
Page 1 1) The Law of demand implies that As price falls quantity demanded increases As price rise demand increases As price fall demand increases As price rise quantity demanded increases 2) Which of the
More informationLesson 11 Aggregate demand and Aggregate Supply
Lesson 11 Aggregate demand and Aggregate Supply Henan University of Technology Sino-British College Transfer Abroad Undergraduate Programme 0 In this lesson, look for the answers to these questions: What
More informationMidsummer Examinations 2013
Midsummer Examinations 2013 No. of Pages: 7 No. of Questions: 34 Subject ECONOMICS Title of Paper MACROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates This paper is in two sections.
More informationIntro to macroeconomics. Rush October 2014
Intro to macroeconomics Rush October 2014 Micro means small. Macro means big. We are moving from micro to macro What is microeconomics? Microeconomics is the study of SPECIFIC markets and the behavior
More informationMacroeconomics CHAPTER 6. Macroeconomics: The Big Picture
Macroeconomics CHAPTER 6 Macroeconomics: The Big Picture What you will learn in this chapter: An overview of macroeconomics, the study of the economy as a whole, and how it differs from microeconomics
More informationNo 02. Chapter 1. Chapter Outline. What Macroeconomics Is About. Introduction to Macroeconomics
No 02. Chapter 1 Introduction to Macroeconomics Chapter Outline What Macroeconomists Do Why Macroeconomists Disagree Macroeconomics: the study of structure and performance of national economies and government
More informationAggregate Demand and Aggregate Supply
Chapter 31 Aggregate Demand and Aggregate Supply Test B 1. Recession refers principally to a. below average real GDP growth. b. negative real GDP growth. c. below average inflation. d. negative inflation.
More informationIntroduction. Over the long run, real GDP grows about 3% per year on average.
Introduction Over the long run, real GDP grows about 3% per year on average. In the short run, GDP fluctuates around its trend. Recessions: periods of falling real incomes and rising unemployment Depressions:
More informationMankiw Chapter 10. Introduction to Economic Fluctuations. Introduction to Economic Fluctuations CHAPTER 10
Mankiw Chapter 10 0 IN THIS CHAPTER, WE WILL COVER: facts about the business cycle how the short run differs from the long run an introduction to aggregate demand an introduction to aggregate supply in
More informationAQA Economics AS-level
AQA Economics AS-level Macroeconomics Topic 2: How the Macroeconomy Works 2.2 Aggregate demand and aggregate supply analysis Notes Aggregate demand is the total demand in the economy. It measures spending
More informationA Macroeconomic Theory of the Open Economy. Chapter 30
A Macroeconomic Theory of the Open Economy Chapter 30 Key Macroeconomic Variables in an Open Economy The important macroeconomic variables of an open economy include: net exports net foreign investment
More informationFinal Term Papers. Fall 2009 (Session 03) ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 (Session 03) ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program
More informationModule 19 Equilibrium in the Aggregate Demand Aggregate Supply Model
What you will learn in this Module: The difference between short-run and long-run macroeconomic equilibrium The causes and effects of demand shocks and supply shocks How to determine if an economy is experiencing
More informationMidsummer Examinations 2011
Midsummer Examinations 2011 No. of Pages: 7 No. of Questions: 37 Subject ECONOMICS Title of Paper MACROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates This paper is in two sections.
More informationAP Macroeconomics - Mega Macro Review Sheet Answers
AP Macroeconomics - Mega Macro Review Sheet Answers 1. The business cycle. 2. Aggregate supply curve (with breakdown of sections). 3. Expansionary ( easy ) monetary policy (Buy bonds, discount rate, reserve
More informationChapter 4. What Macroeconomics Tries to Explain
Chapter 4 What Macroeconomics Tries to Explain 1 Macroeconomic Goals Microeconomics Behavior of individual decision makers and individual markets Macroeconomics Broad outlines of the economy 1. Economic
More information9. ISLM model. Introduction to Economic Fluctuations CHAPTER 9. slide 0
9. ISLM model slide 0 In this lecture, you will learn an introduction to business cycle and aggregate demand the IS curve, and its relation to the Keynesian cross the loanable funds model the LM curve,
More information10. Oferta y demanda agregada
10. Oferta y demanda agregada In this chapter, look for the answers to these questions: What are economic fluctuations? What are their characteristics? How does the model of aggregate demand and aggregate
More informationThe Aggregate Expenditures Model. A continuing look at Macroeconomics
The Aggregate Expenditures Model A continuing look at Macroeconomics The first macroeconomic model The Aggregate Expenditures Model What determines the demand for real domestic output (GDP) and how an
More informationAP Macroeconomics Syllabus Course Outline Required text: Economics: Principles, Problems, and Policies McConnel and Brue 15 th edition
AP Macroeconomics Mrs. Cook 1 st Period Room 210 AP Macroeconomics Syllabus Course Outline Required text: Economics: Principles, Problems, and Policies McConnel and Brue 15 th edition Unit One: Basic Economic
More informationAP Macroeconomics Graphical Overview
AP Macroeconomics Graphical Overview 1. The business cycle. 2. Aggregate supply curve (with breakdown of sections). 3. Expansionary ( easy ) monetary policy (Buy bonds, discount rate, reserve requirement).
More informationLong Run vs. Short Run
Long Run vs. Short Run Long Run: A period long enough for nominal wages and other input prices to change in response to a change in the nation s price level. The Basic Model of Economic Fluctuations Two
More informationLecture 10 Aggregate Demand and Supply. Principles of Macroeconomics KOF, ETH Zurich, Prof. Dr. Jan-Egbert Sturm Fall Term 2008
Lecture 10 Aggregate Demand and Supply Principles of Macroeconomics KOF, ETH Zurich, Prof. Dr. Jan-Egbert Sturm Fall Term 2008 General Information 23.9. Introduction Ch. 1,2 30.9. National Accounting Ch.
More informationObjectives AGGREGATE DEMAND AND AGGREGATE SUPPLY
AGGREGATE DEMAND 7 AND CHAPTER AGGREGATE SUPPLY Objectives After studying this chapter, you will able to Explain what determines aggregate supply Explain what determines aggregate demand Explain macroeconomic
More informationAggregate Demand and Aggregate Supply
C H A P T E R 33 Aggregate Demand and Aggregate Supply Economics P R I N C I P L E S O F N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich 2009 South-Western, a part of Cengage Learning, all
More informationMacro CH 29 sample questions
Class: Date: Macro CH 29 sample questions Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The relationship between real GDP and potential GDP over the
More information1.1 When the interest rate on a bond rises, the price of the bond. 1.2 In the aggregate demand curve, when the price level decreases demand for goods
Elements of Macroeconomics Econ 180.101 Fall 2017 Problem Set 5 Due in TA section: 10/06/2017 or 10/07/2017 Name (Print): Section/TA: 1. Fill in the blanks 1.1 When the interest rate on a bond rises, the
More informationAggregate Demand and the Powerful Consumer
Aggregate Demand and the Powerful Consumer Dr. Ashraf Samir Website: ashraffeps.yolasite.com Contents I) Introduction II) Factors Determining Actual GDP III) The Circular Flow of Spending, Production,
More informationWhat is Macroeconomics?
Lecture 1-1 What is Macroeconomics? 1. Macroeconomics Macroeconomics: the study of the major economic totals (aggregates). Issues involving the overall economic performance of the nation: do people find
More informationECON 3010 Intermediate Macroeconomics Chapter 10
ECON 3010 Intermediate Macroeconomics Chapter 10 Introduction to Economic Fluctuations Facts about the business cycle GDP growth averages 3 3.5 percent per year C (consumption) and I (Investment) fluctuate
More informationMACROECONOMICS - CLUTCH CH INTRODUCING ECONOMIC CONCEPTS.
!! www.clutchprep.com CONCEPT: INTRODUCING MACROECONOMIC CONCEPTS BUSINESS CYCLE Business Cycles describe the increases and decreases in economic activity that occur over periods of several years Employment
More informationAggregate Supply and Demand
Aggregate demand is the relationship between GDP and the price level. When only the price level changes, GDP changes and we move along the Aggregate Demand curve. The total amount of goods and services,
More informationIntroduction to Macroeconomics
Macroeconomics versus Microeconomics? Micro: Greek for small Microeconomics: the study of the parts of the economy. Macro: Greek for large Macroeconomics: the study of the whole economy 1 2 Macroeconomics
More informationAdvanced Placement Macro Economics
Advanced Placement Macro Economics Economics is a study of mankind in the ordinary business of life. Alfred Marshall Through the AP Macroeconomics course, students will have a better understanding of the
More informationAggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply Aggregate Demand and Aggregate Supply The Learning Objectives in this presentation are covered in Chapter 20: Aggregate Demand and Aggregate Supply LEARNING OBJECTIVES
More informationMacroeconomics 2301 Potential questions and study guide for Exam 2
Macroeconomics 2301 Potential questions and study guide for Exam 2 Any 6 of these questions could be on your exam! 1. GDP is a key concept in Macroeconomics. a. What is the definition of GDP? b. List and
More information** Review ** For Test - 3
** Review ** For Test - 3 1. Gross domestic product or GDP is: A) the total dollar value intermediate goods and services produced in the economy in a given time period. B) the total dollar value of wages
More information1. The most basic premise of the aggregate expenditures model is that:
1. The most basic premise of the aggregate expenditures model is that: A. The total output produced in the economy depends directly on the level of total spending B. The level of employment in the economy
More informationChapter 9 Introduction to Economic Fluctuations
Chapter 9 Introduction to Economic Fluctuations facts about the business cycle how the short run differs from the long run an introduction to aggregate demand an introduction to aggregate supply in the
More informationEconomic Growth, Business Cycles, Unemployment, and Inflation
CHAPTER 24 Economic Growth, Business Cycles, Unemployment, and Inflation Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.
More informationLecture 12: Economic Fluctuations. Rob Godby University of Wyoming
Lecture 12: Economic Fluctuations Rob Godby University of Wyoming Short-Run Economic Fluctuations Economic activity fluctuates from year to year. In some years, the production of goods and services rises.
More informationECONOMICS: THE FRAMEWORK FOR BUSINESS. BUSN11 Chapter 2
ECONOMICS: THE FRAMEWORK FOR BUSINESS BUSN11 Chapter 2 Economics: Navigating a Crisis 2-1 Understanding how the government, businesses, and individuals respond to issues requires understanding some basic
More informationBasic Concepts. MICROECONOMICS: deals with specific economic units and a detailed consideration of these individual units.
Basic Concepts ECONOMICS: The study of how limited productive resources are efficiently allocated in a world of unlimited wants. SCARCITY: WANTS EXCEED RESOURCES We want more than we are capable of getting.
More informationchapter: Aggregate Demand and Aggregate Supply 10(1 st ) or 12(2 nd ) ECON Feb. 1, 3, 5 1of Worth Publishers
chapter: 10(1 st ) or 12(2 nd ) >> Aggregate Demand and Aggregate Supply ECON 2020-010 Feb. 1, 3, 5 2009 Worth Publishers 1of 58 Opening Example Who is the chairman of the Federal Reserve? Federal reserve:
More informationProblem Set #2. Intermediate Macroeconomics 101 Due 20/8/12
Problem Set #2 Intermediate Macroeconomics 101 Due 20/8/12 Question 1. (Ch3. Q9) The paradox of saving revisited You should be able to complete this question without doing any algebra, although you may
More informationIn recessions the aggregate demand of economies falls. John Maynard Keynes
In recessions the aggregate demand of economies falls. John Maynard Keynes Disposable Income (YD) Autonomous Consumption + Consumption = $50 + 0.75YD Dependent Income- = Consumption Total Consumption A
More informationMacroeconomics, Cdn. 4e (Williamson) Chapter 1 Introduction
Macroeconomics, Cdn. 4e (Williamson) Chapter 1 Introduction 1) Which of the following topics is a primary concern of macro economists? A) standards of living of individuals B) choices of individual consumers
More informationWe use GDP to compare different economies or to track the same economy over time.
Lecture Notes ECON 1A: Principles of Macroeconomics Chapter 5 - Introduction to Macroeconomics Introduction Macroeconomics looks at the big picture: Demand for: Average price of: Consumption by: Investment
More informationAggregate Supply and Aggregate Demand
Aggregate Supply and Aggregate Demand ECO 301: Money and Banking 1 1.1 Goals Goals Specific Goals Be able to explain GDP fluctuations when the price level is also flexible. Explain how real GDP and the
More informationINTI COLLEGE MALAYSIA UNIVERSITY FOUNDATION PROGRAMME ECO 183 : FOUNDATION ECONOMICS (MACROECONOMICS) RESIT EXAMINATION : AUGUST 2002 SESSION
ECO 183 (R) / Page 1 of 9 INTI COLLEGE MALAYSIA UNIVERSITY FOUNDATION PROGRAMME ECO 183 : FOUNDATION ECONOMICS (MACROECONOMICS) RESIT EXAMINATION : AUGUST 2002 SESSION Section A : Answer ALL questions.
More informationPractice Test 1: Multiple Choice
Practice Test 1: Multiple Choice 1. If aggregate planned expenditure exceeds real GDP A. actual inventories decrease below their target. B. firms are not maximizing their profits. C. planned consumption
More informationBUSI 101 Capital Markets and Real Estate
BUSI 101 Capital Markets and Real Estate PURPOSE AND SCOPE The Capital Markets and Real Estate course (BUSI 101) is intended to acquaint the student with the basic principles of macroeconomics and to give
More informationUnit 3.3 Macroeconomic Models Unit Overview
Unit 3.3 Unit Overview 3.3 Macroeconomic models Aggregate demand - components Aggregate supply >>short-run >>long-run (Keynesian versus neo-classical approach) Full employment level of national income
More informationChapter 11 Aggregate Demand I: Building the IS -LM Model
Chapter 11 Aggregate Demand I: Building the IS -LM Model Modified by Yun Wang Eco 3203 Intermediate Macroeconomics Florida International University Summer 2017 2016 Worth Publishers, all rights reserved
More informationIntroduction to Economic Fluctuations
CHAPTER 10 Introduction to Economic Fluctuations Modified for ECON 2204 by Bob Murphy 2016 Worth Publishers, all rights reserved IN THIS CHAPTER, OU WILL LEARN: facts about the business cycle how the short
More informationAGGREGATE SUPPLY, AGGREGATE DEMAND, AND INFLATION: PUTTING IT ALL TOGETHER Macroeconomics in Context (Goodwin, et al.)
Chapter 13 AGGREGATE SUPPLY, AGGREGATE DEMAND, AND INFLATION: PUTTING IT ALL TOGETHER Macroeconomics in Context (Goodwin, et al.) Chapter Overview This chapter introduces you to the "Aggregate Supply /Aggregate
More informationECF2331 Final Revision
Table of Contents Week 1 Introduction to Macroeconomics... 5 What Macroeconomics is about... 5 Macroeconomics 5 Issues addressed by macroeconomists 5 What Macroeconomists Do... 5 Macro Research 5 Develop
More informationFinal Term Papers. Spring 2009 (Session 02b) ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Spring 2009 (Session 02b) ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program
More informationTest Review. Question 1. Answer 1. Question 2. Answer 2. Question 3. Econ 719 Test Review Test 1 Chapters 1,2,8,3,4,7,9. Nominal GDP.
Question 1 Test Review Econ 719 Test Review Test 1 Chapters 1,2,8,3,4,7,9 All of the following variables have trended upwards over the last 40 years: Real GDP The price level The rate of inflation The
More informationECNS Fall 2009 Practice Examination Opportunity
ECNS 202 -- Fall 2009 Practice Examination Opportunity Mark the answer on the provided scantron sheet using a #2 lead pencil. Erase completely. I am not responsible for poorly marked or poorly erased asnwers.
More informationQuestions and Answers
Questions and Answers Chapter 1 Q1: MCQ Aggregate demand 1. The aggregate demand curve: A) is up-sloping because a higher price level is necessary to make production profitable as production costs rise.
More informationAggregate Demand & Aggregate Supply
Aggregate Demand The aggregate demand () curve shows the total amounts of goods and services that consumers, businesses, governments, and people in other countries will purchase at each and every price
More informationIntroduction. Learning Objectives. Chapter 11. Classical and Keynesian Macro Analyses
Chapter 11 Classical and Keynesian Macro Analyses Introduction The same basic pattern has repeated four times in recent U.S. history: 1973-1974, 1979-1980, 1990, and 2001. First, world oil prices jump.
More informationTest 3: April 4, Multiple Choice 30 points (1 each) Select the best answer for each question. Answer the questions on the Scantron sheet.
Test 3: April 4, 2002 Multiple Choice 30 points (1 each) Select the best answer for each question. Answer the questions on the Scantron sheet. 1. Suzanne, a Canadian resident, purchases stock in a Thai
More informationTHE INFLUENCE OF MONETARY AND FISCAL POLICY ON AGGREGATE DEMAND
20 THE INFLUENCE OF MONETARY AND FISCAL POLICY ON AGGREGATE DEMAND LEARNING OBJECTIVES: By the end of this chapter, students should understand: the theory of liquidity preference as a short-run theory
More informationAP Econ Practice Test Unit 5
DO NOT WRITE ON THIS TEST! AP Econ Practice Test Unit 5 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The marginal propensity to consume is equal to:
More informationMacroeonomics. 20 this chapter, Aggregate Demand and Aggregate Supply. look for the answers to these questions: Introduction. N.
C H A T E R In 20 this chapter, look for the answers to these questions: Aggregate Demand and Aggregate Supply R I N C I L E S O F Macroeonomics N. Gregory Mankiw remium oweroint Slides by Ron Cronovich
More informationKeynes Law and Say s Law in the AD/AS Model
Keynes Law and Say s Law in the AD/AS Model By: OpenStaxCollege The AD/AS model can be used to illustrate both Say s law that supply creates its own demand and Keynes law that demand creates its own supply.
More informationThe Classical Long-Run Model. Chapter 7. Macroeconomic Models: Classical Versus Keynesian. Macroeconomic Models: Classical Versus Keynesian
hapter 7 The lassical Long-Run Model 1 The lassical Long-Run Model The distinction between Long-Run (L/R) and Short-Run (S/R) is important in economics Many apparent disagreements among macroeconomists
More informationMacroeconomics. Aggregate Demand and Aggregate Supply. Introduction. In this chapter, look for the answers to these questions: N.
C H A T E R 15 Aggregate Demand and Aggregate Supply B R I E F R I N C I L E S O F Macroeconomics N. Gregory Mankiw remium oweroint Slides by Ron Cronovich 2010 South-Western, a part of Cengage Learning,
More informationLecture 5: Measuring a Nation s Wealth. Rob Godby University of Wyoming
Lecture 5: Measuring a Nation s Wealth Rob Godby University of Wyoming Macroeconomics Macroeconomics is the study of the economy as a whole. Its goal is to explain the economic changes that affect many
More informationBuchholz, Todd. New Ideas From Dead Economists. New York: Plame, 1999
AP MACROECONOMICS COURSE SYLLABUS AP Macroeconomics is a one semester college level course. The AP Macroeconomics course is designed as an initial college level course in macroeconomics and as a foundation
More informationEconomics Unit 3 Summary
SSEMA1 Illustrate the means by which economic activity is measured. Economic activity derives from the sectors of the economy explored in the fundamentals and microeconomics units. Individuals, businesses,
More informationchapter: Aggregate Demand and Aggregate Supply Aggregate Demand The Aggregate Demand Curve The Aggregate Demand Curve
>> chapter: 1 Demand and Supply Krugman/Wells WHAT YOU WILL LEARN IN THIS CHAPTER " How the demand curve illustrates the relationship between the and the quantity of output demanded in the economy " How
More informationCFA Candidate Self-Assessment Test
CFA Candidate Self-Assessment Test The CFA Program is postgraduate. The readings assigned in the study program and the questions on the CFA examinations are geared for individuals who are prepared to deal
More information22/03/2012. Inflation Cycles. The 1920s were years of unprecedented prosperity.
The 1920s were years of unprecedented prosperity. Then, in October 1929, the stock market crashed. Overnight, stock prices fell by 30 percent. The Great Depression began and by 1933, real GDP had fallen
More informationCHAPTER 1 Introduction
CHAPTER 1 Introduction CHAPTER KEY IDEAS 1. The primary questions of interest in macroeconomics involve the causes of long-run growth and business cycles and the appropriate role for government policy
More informationCircular Flow of Income
Business Environment 2 Week 2 Circular Flow of Income 1 Learning Objectives To understand the concepts of circular flow of income To bring out the relationship between the four macroeconomic objectives
More informationTHE AD (AGGREGATE DEMAND) / AS (AGGREGATE SUPPLY) MACRO MODEL
THE AD (AGGREGATE DEMAND) / AS (AGGREGATE SUPPLY) MACRO MODEL Again, we visit the supply and demand framework. However, when applied to Macroeconomics, we use the following terms in setting up our graph:
More informationFigure 3-3: Consumer and Capital Goods
AP Economics 2018-2019 Final Exam Krugman Text Study Sheet Module/Question# 1/1 Microeconomics deals with: 1/2 Macroeconomics deals with: 1/3 Scarcity in economics means: 2/4 Too little spending in an
More informationMacroeconomics 1 Lecture 11: ASAD model
Macroeconomics 1 Lecture 11: ASAD model Dr Gabriela Grotkowska Lecture objectives difference between short run & long run aggregate demand aggregate supply in the short run & long run see how model of
More informationECON Drexel University Summer 2008 Assignment 2. Due date: July 29, 2008
ECON 202-001 Drexel University Summer 2008 Assignment 2 Due date: July 29, 2008 Instructor: Yuan Yuan Name This homework has up to 10 points bonus. Question 1 (40 points, 2 points each): MULTIPLE CHOICE.
More informationECO401 Quiz # 5 February 15, 2010 Total questions: 15
ECO401 Quiz # 5 February 15, 2010 Total questions: 15 Question # 1 of 15 ( Start time: 09:37:50 PM ) Total Marks: 1 Economic activity moves from a trough into a period of until it reaches a and then into
More informationmacro macroeconomics Aggregate Demand I N. Gregory Mankiw CHAPTER TEN PowerPoint Slides by Ron Cronovich fifth edition
macro CHAPTER TEN Aggregate Demand I macroeconomics fifth edition N. Gregory Mankiw PowerPoint Slides by Ron Cronovich 2002 Worth Publishers, all rights reserved In this chapter you will learn the IS curve,
More information