...for this week include aggregate demand, aggregate supply, the Keynesian Model, and the Classical Model. You have an opportunity to explore these concepts in the Learning Team Weekly Reflection, the Fundamentals of Macroeconomics Paper, and the discussion topic. Aggregate Demand and Supply Models OBJECTIVE: Analyze the impact of various factors on aggregate demand and supply. Resource: Ch. 10 of Macroeconomics. Content • Ch. 10: “The Aggregate Demand/Aggregate Supply Model” o The Historical Development of Modern Macro o The AS/AD Model o The Aggregate Demand Curve o The Short-Run Aggregate Supply Curve o The Long-Run Aggregate Supply Curve o Equilibrium in the Aggregate Economy o Why Macro Policy Is More Complicate Than the AS/AD Model Makes It Look OBJECTIVE: Evaluate the effectiveness of changes in fiscal policies using Keynesian and Classical models Resource: Ch. 12 of Macroeconomics. Content • Ch. 12: “Thinking Like a Modern Macroeconomist” o Why It Is Important to Know about Modern Macro Theory o Engineering Models and Scientific Models o From the Keynesian Revolution to Modern Macro Models o A Beginner’s Guide to the DSGE Model o Policy Implications of the DSGE Model o How Relevant Are the Problems? o Modern Macroeconomic Policy and the Collapse of the Tacoma Narrows Bridge o The Complexity Approach to Macro: The Future of Modern Macro o The Underlying...
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...Define Macroeconomics? Difference between Microeconomics And Macroeconomics. Macroeconomics is the part of economics concerned with large scale of general economic factors, such as interest rate & national productivity. Simply, macroeconomics is the study of behavior of the economy as a whole. Broadly, macroeconomics is the field of economy that studies the behavior of the aggregate economy. Macroeconomics is the branch of economics that studies the entire economy. O. M. Amos Macroeconomics, which is the study of broad aggregates such as total employment & national income. Henderson & Quanat Macroeconomics deals with large scal economic activities of environment. G. Akle Macroeconomics examines economy in wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation & price level. Finally, macroeconomics is the study of broad economic activities & trends, is possibly the largest subfield in economy which consider the performance of the economy as a whole. Microeconomics | Macroeconomics | Microeconomics is the study of the individuals economy of a person, a company or a country. | Macroeconomics is the study of the economy as a whole. | Microeconomics is also known as price theory. | Macroeconomics is also known as income theory. | All kinds of requirements of an individual or a company can be identified. | All...
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...of Macroeconomics by Smriti Chand Macro Economics The Nature and Scope of Macroeconomics! Introduction: The term ‘macro’ was first used in economics by Ragner Frisch in 1933. But as a methodological approach to economic problems, it originated with the Mercantilists in the 16th and 17th centuries. They were concerned with the economic system as a whole. In the 18th century, the Physiocrats adopted it in their Table Economies to show the ‘circulation of wealth’ (i.e., the net product) among the three classes represented by farmers, landowners and the sterile class. Malthus, Sismondi and Marx in the 19th century dealt with macroeconomic problems. Walras, Wicksell and Fisher were the modern contributors to the development of macroeconomic analysis before Keynes. Certain economists, like Cassel, Marshall, Pigou, Robertson, Hayek and Hawtrey, developed a theory of money and general prices in the decade following the First World War. But credit goes to Keynes who finally developed a general theory of income, output and employment in the wake of the Great Depression. Contents: Nature of Macroeconomics Difference between Microeconomics and Macroeconomics Dependence of Microeconomic Theory on Macroeconomics Dependence of Macroeconomics on Microeconomic Theory Macro Statics, Macro Dynamics and Comparative Statics Transition from Microeconomics to Macroeconomics Stock and Flow Concepts 1. Nature of Macroeconomics:________________________________________ Macroeconomics is the...
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...level. What we mean by individual level is they may be by individual company, firm or an entity business person. The way the different entities behave may differ due to their different demands and supply. What we mean by decision made at a common level is that it looks at the entire activities and behavior of the entire economy. This may be at national level, regional level or even global level. Difference between microeconomics and macroeconomics Economics is primarily split into two major sections, this are the macroeconomics and the microeconomics. The two are so much connected. Adjustment in one affects the other. Both of them work together in the world of economy. The macroeconomics can be considered to be the summation of microeconomics. However there exists a difference in the two. We shall be discussing on the distinction between the two in the subsequent few paragraphs. To begin with, the naming denotes that there is a difference between macro and microeconomics.’ macro’ stands for large in Greek, while 'micro’ stands for small in Greek. This is to explain that microeconomics covers the economy of smaller regions such as a firm, a company or even individual businesses. Macroeconomics is concerned with a larger area such as regional, national or global economy. Macroeconomics studies indicators such as inflation, GDP, unemployment, rates and price indices in order to get a comprehension on how the entire economy works. It looks into issues like national income...
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...Macroeconomy Chapter 6: * Central Park contained one of the “Hoovervilles” that had sprung up all across America as a result of a catastrophic economic slump in 1929. (The Great Depression) * During the time of Great Depression, microeconomics was a well-developed branch of economics, but macroeconomics was not. * In the 1930’s, there were no expanding industries; everything was headed downward. * Microeconomics focuses on how decisions are made by individuals and firms and the consequences of those decisions; Macroeconomics examines the overall behavior of the economy—how the actions of all the individuals and firms in the economy interact to produce a particular economy-wide level of economic performance. * Many thousands or millions of individual actions compound upon one another to produce an outcome that isn’t simply the sum of those individual actions. (rubber-necking traffic jam example) * Paradox of thrift: when families and businesses are worried about the possibility of economic hard times, they prepare by cutting their spending. This reduction in spending depresses the economy as consumers spend less and businesses react by laying off workers. As a result, families and businesses may end up worse off than it they hadn’t cut their spending. * The flip-side is also true; seemingly profligate behavior leads to good times for all * Before 1930’s, economists regarded the economy as self-regulating: unemployment would...
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... Explain why the study of macroeconomics is important in making business decisions. Macroeconomics is the study of the economy as a whole. It is the study of the aggregate demand and aggregate supply which reflect the demand and supply of everybody in the whole country. It examines the activities and trends in economy’s wide phenomena, such as unemployment, inflation, economic growth, money supply, budget deficits, and exchange rates. The knowledge from this study will indicate the ‘health’ condition of economy in the country. As a business owner, the study of the macroeconomics is very important to make everyday business decisions as they have to focus beyond what is happening in the firm and look into aggregate demand and aggregate supply in economy. Managers always need information or knowledge to make decisions. Example is demand theory. If people get low income, they tend to spend less than when they are getting higher income. As the managers are forecasting the demand for their products and services, anticipation of how consumers’ incomes will grow should be learned. To make decisions, business owner should also know about the current interest rates for loans if they are about to borrow money from the financial institution. They should also be aware about where they stand in the business cycle. Cost of labour is another important reason to study of macroeconomic in order to make better decision. For example, during tight labour supply, the price or salary of the...
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...as Prentice Hall • Macroeconomics, 5/e • Olivier Blanchard 1-1 The United States Table 1-1 1996–2006 (average) 2006 2007 2008 3.1% 3.4% 3.3% 2.1% 2.5% Output growth rate Unemployment rate 6.2 5.0 4.6 4.6 4.8 Inflation rate The unemployment rate 4.0 2.0 2.9 2.6 2.2 Output growth rate: annual rate of growth of output (GDP). Unemployment rate: average over the year. Inflation rate: annual rate of change of the price level (GDP deflator). 3 of 18 Chapter 1: A Tour of the World The inflation rate The period 1996-2006 was one of the best decades in recent memory: The average rate of growth was 3.4% per year. The average unemployment rate was 5.0%. The average inflation rate was 2.0%. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall • Macroeconomics, 5/e • Olivier Blanchard 1-1 The United States 4 of 18 1-1 The United States Has the United States Entered a New Economy? Should We Worry About the U.S. Trade Deficit? Figure 1 - 2 Figure 1 - 3 Rate of Growth of Output per Hour in the United States Since 1960. The U.S.Trade Deficit Since 1990 The trade deficit increased from about 1% of output in 1990 to about 6% of output in 2006. The average rate of growth of output per hour appears to have increased again since the mid-1990s. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall • Macroeconomics, 5/e • Olivier Blanchard ...
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...Microeconomics, Macroeconomics and Econometrics Inputs and Outputs . . . . . . . . . . . . . . . . . . Opportunity Costs . . . . . . . . . . . . . . . . . . Positive Economics versus Normative Economics . . The three Problems of Economics Organization . . The ten Principles in Economics . . . . . . . . . . . Economics as a Science . . . . . . . . . . . . . . . . How to read graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 6 6 6 6 7 7 8 11 15 15 15 17 19 20 20 21 22 22 22 23 23 23 24 25 26 31 31 33 34 35 35 38 40 40 43 47 47 47 48 48 48 2 Microeconomics Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . . The Demand Schedule . . . . . . . . . . . . . . . . . . . . The Supply Schedule . . . . . . . . . . . . . . . . . . . . . Equilibrium of Supply and Demand . . . . . . . . . . . . . Elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The price elasticity of demand . . . . . . . . . . . . . . . . The income elasticity of demand . . . . ...
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...INTRODUCTION TO MACROECONOMICS E202 $ ¥ Dr. David A. Dilts Department of Economics Doermer School of Business and Management Sciences Indiana-Purdue University-Fort Wayne June 1, 1993 Revisions: May 1994, December 1995, July 1996, November, 2000, May 2003, May 2006 PREFACE This Course Guide was developed in part because of the high cost of college textbooks, and in part, to help organize students’ studying by providing lecture notes together with the reading assignments. This Guide is provided to the student online at the Department of Economics website. Jayla Heller, the Department’s secretary has been kind enough to go through all of the frustration and hard work to put the guide in the appropriate format and put it online. To her goes my gratitude. The department, neither school, nor the professor make anything whatsoever from this Guide. In fact, the department’s budget and the professor’s own resources are used in the writing of the Guide, and the numerous draft copies that are produced in the revisions of this document. Like the sign in the Mom and Pop bait shop on Big Barbee Lake says, “This is a non-profit organization, wasn’t planned to be – it just worked out that way.” Well, actually it was planned to be a non-profit enterprise in this case. The professor also wishes to acknowledge the fact that several students have proposed changes, improvements, caught errors, and helped to make this document more useful as a learning tool. Naturally, any errors of omission...
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...------------------------------------------------- Quantitative Easing ------------------------------------------------- Table of Contents Quantitative Easing in general: 2 How the USA Federal Reserve has put QE in practice. 3 QE plan recently approved by the European Central Bank. 4 Likely effects of QE in the Euro Area in relation to the aggregate supply/aggregate demand model and the loanable funds theory 5 Discuss the effects the QE can have on exchange rates. 6 Abstract This paper presents an overview of the policy of Quantitative Easing, used by central banks in an effort to revive the economic system and interrupt a period of economic recession. Quantitative Easing in general In the instance of a crisis such as the one of 2008, Central Banks put monetary and fiscal policies in practice in order to limit the damage to firms and households an maintain a healthy economic environment. The most used and widespread policy used by Central Banks acts upon the interest rates. Lowering interest rates, for example, makes it more convenient for individuals and firms to increase investments rather than save, thereby increasing spending. An increase in investments and spending within the system should, in theory, take the economy out of a recession. However, once the interest rate reaches zero (zero bound ratio) without obtaining any results, CBs must adopt other policies. One of these is the policy of Quantitative Easing; it consists in CBs providing liquidity...
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...TAXATION. Name: Institution: A) Effect of Taxation. Taxation is a system of levying taxes on various types of earnings, income and/or purchases. It is an essential part of a modern state whereby the government obtains revenue, which is used for provision of education, health care and living benefits to a range of its citizens (Sullivan 2003). The UK tax system has several incompatible objectives, for instance redistribution of income and wealth creation (through tax breaks). The government must take into account the issue of fairness in taxation, if it is to provide an acceptable tax system in the United Kingdom (Wales 2008). The social function of taxation is to ensure that there is wealth redistribution, in order to create a fair and harmonious society. According to Adam Smith, fairness in taxation promotes morality and equity in free market economics (Sullivan 2003). Fairness in taxation ensures that market failures are tackled. A fair tax regime ensures that the revenue collected is shared equitably and appropriately through judicious expenditure. According to Adam Smith, equity in taxation implies that the taxpayers pay taxes that are proportionate to their income, while the allocation of government resources does not adhere to this proportionality. A fair tax has the following four attributes: equity, efficiency, certainty and convenience. Equity ensures that the tax has a reasonable impact on the taxpayers. Equity is categorized into two forms: horizontal...
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...concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity. Macroeconomics examines either the economy as a whole or its basic subdivisions or aggregates, such as the government, household, and business sectors. Microeconomics is the study of parts of economics concerned with particular markets, and segments. This study looks at analysis in a single household, a company, or a specific industry. Microeconomics looks closely at supply and demand in single markets, consumer’s behaviors and choices. However, Macroeconomics is the study of the economy as a whole unit or its elementary sectors or aggregates, such as the government, household, and business subdivisions. Class based on what you have read in this chapter, explain the law of demand. Why does a demand curve slope downward? How is a market demand curve derived from individual demand curves? Based on this chapter, law of demand is when other factors are the same, the quantity of demand increase as prices falls, and the demanded quantity decreases as prices rises. The demand curve slope downward reflects the demand law philosophy because there a negative relationship between price changes and the demanded quantity of a particular product. If there are two buyer representing two different individual demand curves There are a variety of modern definitions of economics. Some of the differences may reflect evolving views of the subject itself or different views...
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...Kennesaw State University – Spring 2014 Department of Economics, Finance, and Quantitative Analysis ECON2200-Sec:W01 (CRN: 10999) - Principles of Macroeconomics Instructor: Murat Doral Office: BB456 Phone: 678-797-2656 KSU e-mail: mdoral@kennesaw.edu Office Hours MW 10:00am-12:30pm or by appointment. Required Textbook: Mankiw, Gregory N. Western/Cengage Learning, 2009. Principles of Economics, Fifth Edition, South- Course Description: Analysis of socioeconomic goals, money and credit systems, theories of national income, employment and economic growth. Course Prerequisites: ECON2100 and six (6) credit hours of MATH numbered 1101 or higher. Course Description: This course is an introduction to the formal study of macroeconomics. Macroeconomics involves the study of the economy as a whole. Topics that will be covered include national income determination, the general price level, interest rates, unemployment, and fiscal and monetary policies. The emphasis will be on genuine understanding of the material, and not on "memorization". (See last page of Syllabus for Course Learning Objectives.) Course Withdrawal Date and Policy: Last day to withdraw without academic penalty is Monday 03/03/2014. Students who wish to withdraw with a grade "W" must do so formally through the Registrar's Office on or before Monday 03/03/2014. Make-Up Exam Policy: No make-up exams will be administered during the semester. It is the student’s responsibility to check the course calendar and announcements...
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...201: PRINCIPLES OF MACROECONOMICS Fall Term 2015 2:00-3:15 PM Mondays and Wednesdays Room 1090 CASL CRN # 11014 Section 004 Carol Hogan Office Hours: 10:00-10:45 AM 2190 Social Sciences Building Mondays and Wednesdays, 1:00- 313-436-9181 1:45 PM Mondays and Wednesdays, clhogan@umich.edu 5:00-5:45 PM Mondays, and by appointment |ECON 201 - Prin: Macroeconomics | |Together with ECON 202, this course serves to introduce the student to the basic ideas and concepts of modern economic analysis, and applies| |them to current economic problems, policies and issues. The focus of this course is on macroeconomics: income and wealth, employment, and | |prices at the national level in the United States economy. It is recommended that students take ECON 201 before ECON 202. MATH 105 is highly| |recommended but not required. (F,W,S). | |ECON 201 - Prin: Macroeconomics | |Together with ECON 202, this course serves to introduce the student to the basic ideas and concepts of modern economic analysis, and applies| |them to current economic problems, policies and issues. The focus of this course is on macroeconomics: income and wealth...
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...Inflation – Impacts On The Economic Growth Of Nigeria By DoubleGist | Published: June 5, 2013 Inflation – Impacts On The Economic Growth Of Nigeria Inflation – Impacts On The Economic Growth Of Nigeria A macroeconomics problem facing Nigeria, and the most disturbing, is the problem of inflation. As a result of its growing rate, Nigerian government is concerned about its impacts on her economic growth. To place an order for the Complete Project Material, pay N5,000 to GTBank (Guaranty Trust Bank) Account Name – Chudi-Oji Chukwuka Account No – 0044157183 Then text the name of the Project topic, email address and your names to 08060565721. Many authors have written on Impacts of inflation on Nigerian economy, but the authors have different views because inflation analysis, nevertheless, one thing common is that all the authors agree that inflation has Impact on Nigerian economic growth. Samuelson (1973), defines inflation as “a general rising prices for breeds, cars, haircut, rising wages, rent etc. Onwukwe (2003), on his side defines inflation as “a significant and sustained rise in the general price level or a declining value of the monetary units. The problem created by the rising prices of goods and services has become two difficult for government to solve. During inflationary period, fixed amounts of money buy less quantity of goods and services. The real value of money is drastically reduced i.e the purchasing power of consumers are reduced. The Impact of rapid...
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