INTRODUCTION TO MACROECONOMICS Social Studies

Introduction to Macro Economics

1. INTRODUCTION TO MACROECONOMICS

2. WHAT IS MACROECONOMICS? It is a field of study that examines the behavior of an economy, including markets, businesses, consumers, and governments. It examines economy-wide phenomena such as inflation, price levels, the rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.

3. KEY QUESTIONS ANSWERED BY MACROECONOMICS 1. What causes unemployment? 2. What causes inflation? 3. What creates or stimulates economic growth?

4. WHAT IS MACROECONOMICS? Macroeconomics attempts to measure how well an economy is performing, understand what forces drive it, and project how performance can improve.

5. UNDERSTANDING MACROECONOMICS As the term implies, macroeconomics is a field of study that analyzes an economy through a wide lens. This includes looking at variables like unemployment, GDP, and inflation. In addition, macroeconomists develop models explaining the relationships between these factors.

6. UNDERSTANDING MACROECONOMICS These models, and the forecasts they produce, are used by government entities to aid in constructing and evaluating economic, monetary, and fiscal policy. Businesses use the models to set strategies in domestic and global markets, and investors use them to predict and plan for movements in various asset classes.

7. UNDERSTANDING MACROECONOMICS Properly applied, economic theories can illuminate how economies function and the long-term consequences of particular policies and decisions. Macroeconomic theory can also help individual businesses and investors make better decisions through a more thorough understanding of the effects of broad economic trends and policies on their own industries.

8. 5 GOALS OF MACROECONOMICS Sustained economic growth Price stability Full employment Trade balance Redistribution of income

9. MACROECONOMICS The real purpose of macroeconomics is to explain our condition as a nation and finding ways to optimally use our resources in order for us to achieve the highest standard of living possible.

10. MACROECONOMICS It is the study of how we can increase our country’s wealth given the available resources we have and develop these resources into goods and services in the best possible way in order to satisfy our needs and wants

11. MACROECONOMICS Wealth in this definition includes tangibles like cars, houses, appliances and condominiums as well as intangibles like more leisure time, cleaner air and the like

12. MACROECONOMIC DECISIONS

13. MACROECONOMIC DECISIONS Some economists promote a great amount of government involvement, price controls, active monetary policy and so on

14. MACROECONOMIC DECISIONS Others believe that government involvement should be minimal and limited to tasks related to defending individual rights, national defense and security, maintenance of peace and order and so on

15. MACROECONOMIC DECISIONS Many believe that a combination of moderate government involvement and private initiatives is ideal for achieving the highest standard of living.