Macroeconomics
Relevant to the world politics, and deals with the job of making economics policies Helps to predict the future course of economic events while providing a great deal of knowledge about how the economy works. Deals with both long run economic issues and the short run fluctuations that constitute the business cycle.
Difference between Macro and Micro Macroeconomics Is concerned with aggregate factors More Practical Ex- inflation, unemployement Microeconomics Is concerned with specific economic units More theoretical Ex individual demand, supply
Demand, Supply and Equilibrium Aggregate demand and supply means total demand for commodities and total supply of commodities in an economy respective. Aggregate supply relationship between the aggregate quantity of real GDP supplied and the price level or amount of output the economy can produce given the resources and technology available. Aggregate quantity of goods and services supplied is the sum of the quantities of all final goods and services that all firms in the economy planned to produce. Position of supply curve depends on the productive capacity of the economy. Aggregate Demand relationship between the aggregate quantity of real GDP demanded and the price level. The aggregate demand curve shows the level of output at which the goods markets and money market are simultaneously in equilibrium at each given price level. The position of the aggregate demand curve depends on monetary and fiscal policy and the level of consumer confidence.
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Equilibrium = =
Macroeconomic issues Inflation - how quickly prices are raising. High inflation caused to less demand Unemployment the fraction of the labour force that is out of work = 100 Growth rate at which the gross domestic product is increasing. Two causes affect to grow GDP overtime Changes in available amount of resources in the economy Changes in the efficiency of factors of production Business cycle
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Macroeconomics measurements
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Macroeconomics measurements GNP Income Method Rentals,Dividends,Depreciation,intrests,etc. Expenditure Method
= + + + = = = = = ( )
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GDP And GNP Gross Domestic Product value of all final goods and services produced in the country within a given time period. = + = = ( )/( ) GNP Deflator reflects what is happening to the overall level of prices in the economy
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