This document provides an overview of macroeconomics concepts from a textbook. It discusses what macroeconomists study, including issues like recessions, government spending, and inflation. It also covers the tools macroeconomists use, such as economic models, and key concepts around prices being flexible or sticky in the short and long run. The document outlines the chapters in the textbook, which cover classical economic theory, growth theory, business cycles, and macroeconomic policy.
This chapter introduces macroeconomics and the issues it addresses, such as economic growth, unemployment, and inflation. It discusses how macroeconomists use models to study these topics. Models make simplifying assumptions about factors like flexible vs. sticky prices to examine long-run versus short-run economic behavior. The chapter outlines the structure of the macroeconomics textbook in examining classical theory, growth theory, business cycles, and policy debates.
This chapter introduces macroeconomics and its key concepts. It discusses how macroeconomists study issues like economic growth, unemployment, and inflation at an aggregate level. The chapter also outlines the tools macroeconomists use, including economic models that simplify complex realities. It provides an example supply and demand model of the car market and discusses the distinction between endogenous and exogenous variables. The chapter concludes with an outline of the book's contents and a summary of macroeconomics as the study of the economy as a whole.
This document provides an overview and outline of macroeconomics topics covered in a textbook. It discusses the key issues macroeconomists study like recessions, inflation, and unemployment. It introduces economic models as simplified representations of reality used to study relationships between variables and devise policies. The document outlines different models used to examine short-run issues when prices are sticky versus long-run issues when prices are flexible. It concludes with a summary of macroeconomics as the study of the overall economy and growth.
This chapter introduces macroeconomics and the issues studied in the field. It discusses important macroeconomic concepts like GDP, unemployment, inflation, and recessions. The chapter explains that economists use different models to study different macroeconomic questions in both the short-run when prices are sticky and long-run when prices are flexible. It provides an example model of supply and demand for cars and how the model can be used to analyze the effects of changes in income and costs.
Macroeconomics is the study of the economy as a whole, including growth, prices, and unemployment. Economists use models to understand different economic issues, with flexible price models describing the long run and sticky price models for the short run. This chapter introduced macroeconomics and economic models, explaining how models simplify reality to show relationships between variables and inform policies. It also outlined the topics to be covered in the book.
Macroeconomics is the study of the economy as a whole, including issues like economic growth, inflation, and unemployment. Economists use various models to examine different macroeconomic issues in both the short-run and long-run. Models with flexible prices describe the long-run, while models with sticky prices are used for the short-run. Macroeconomic outcomes emerge from individual microeconomic actions.
Macroeconomics is the study of the economy as a whole, including issues like growth, inflation, and unemployment. Economists use models to help explain and address these issues. Models make simplifying assumptions, like whether prices are flexible or sticky in the short-run. The chapter introduces concepts like endogenous and exogenous variables. It provides an example model of supply and demand for cars and how it can be used to analyze changes. The chapter outlines the topics that will be covered in the macroeconomics textbook, including classical theory, growth theory, and business cycle theory.
Macroeconomics is the study of the economy as a whole, including issues like growth, inflation, and unemployment. Economists use models to help explain and address these issues. Models make simplifying assumptions, like treating some variables as flexible or sticky. No single model can address all questions, so macroeconomics uses different models for different time periods and issues.
This chapter introduces macroeconomics and the issues it addresses, such as economic growth, unemployment, and inflation. It discusses how macroeconomists use models to study these topics. Models make simplifying assumptions about factors like flexible vs. sticky prices to examine long-run versus short-run economic behavior. The chapter outlines the structure of the macroeconomics textbook in examining classical theory, growth theory, business cycles, and policy debates.
This chapter introduces macroeconomics and its key concepts. It discusses how macroeconomists study issues like economic growth, unemployment, and inflation at an aggregate level. The chapter also outlines the tools macroeconomists use, including economic models that simplify complex realities. It provides an example supply and demand model of the car market and discusses the distinction between endogenous and exogenous variables. The chapter concludes with an outline of the book's contents and a summary of macroeconomics as the study of the economy as a whole.
This document provides an overview and outline of macroeconomics topics covered in a textbook. It discusses the key issues macroeconomists study like recessions, inflation, and unemployment. It introduces economic models as simplified representations of reality used to study relationships between variables and devise policies. The document outlines different models used to examine short-run issues when prices are sticky versus long-run issues when prices are flexible. It concludes with a summary of macroeconomics as the study of the overall economy and growth.
This chapter introduces macroeconomics and the issues studied in the field. It discusses important macroeconomic concepts like GDP, unemployment, inflation, and recessions. The chapter explains that economists use different models to study different macroeconomic questions in both the short-run when prices are sticky and long-run when prices are flexible. It provides an example model of supply and demand for cars and how the model can be used to analyze the effects of changes in income and costs.
Macroeconomics is the study of the economy as a whole, including growth, prices, and unemployment. Economists use models to understand different economic issues, with flexible price models describing the long run and sticky price models for the short run. This chapter introduced macroeconomics and economic models, explaining how models simplify reality to show relationships between variables and inform policies. It also outlined the topics to be covered in the book.
Macroeconomics is the study of the economy as a whole, including issues like economic growth, inflation, and unemployment. Economists use various models to examine different macroeconomic issues in both the short-run and long-run. Models with flexible prices describe the long-run, while models with sticky prices are used for the short-run. Macroeconomic outcomes emerge from individual microeconomic actions.
Macroeconomics is the study of the economy as a whole, including issues like growth, inflation, and unemployment. Economists use models to help explain and address these issues. Models make simplifying assumptions, like whether prices are flexible or sticky in the short-run. The chapter introduces concepts like endogenous and exogenous variables. It provides an example model of supply and demand for cars and how it can be used to analyze changes. The chapter outlines the topics that will be covered in the macroeconomics textbook, including classical theory, growth theory, and business cycle theory.
Macroeconomics is the study of the economy as a whole, including issues like growth, inflation, and unemployment. Economists use models to help explain and address these issues. Models make simplifying assumptions, like treating some variables as flexible or sticky. No single model can address all questions, so macroeconomics uses different models for different time periods and issues.
This chapter introduces macroeconomics and the tools used in macroeconomic analysis. It discusses important macroeconomic issues like unemployment, inflation, and recessions. Economists use models to study these issues; models simplify reality by stripping out irrelevant details. A model of supply and demand for cars is presented to illustrate how endogenous and exogenous variables work in a model. The chapter outlines the rest of the book and distinguishes between models that assume flexible prices, describing the long-run economy, versus sticky prices, describing the short-run.
chap 1.Economic model and macro iindicators Mankiw.pptwaleedlink96
This chapter introduces macroeconomics and the key variables of GDP, inflation, and unemployment. The objective is to develop an analytical framework to explain trends in these variables and how government policies can affect them. Models are used to simplify complex economic relationships and analyze how changes in factors like income, prices, and supply/demand influence equilibrium outcomes. The chapter discusses the supply and demand model of the car market as an example and notes the importance of distinguishing endogenous and exogenous variables. It also introduces the concept of price flexibility versus stickiness and how this impacts the economy in the short versus long run.
This chapter introduces macroeconomics and the key issues it addresses such as economic growth, unemployment, inflation, and recessions. It discusses the tools macroeconomists use like economic models to study these issues and simplify complex realities. Models can have flexible or sticky prices to examine long-run or short-run economic behavior. The chapter provides an overview of the topics that will be covered in the book.
This course provides students with an understanding of macroeconomic analysis and application of microeconomic theory. The tentative course outline covers topics such as aggregate supply and demand, money supply and inflation, and unemployment. Students will complete a term paper and presentation analyzing a macroeconomic issue. Assessment includes exams, assignments, and the paper/presentation.
chap 1.Economic model and macro iindicators Mankiw (1).pptmaaidahussain1
This chapter introduces macroeconomics and the goals of the course. It will develop an analytical framework to explain economic growth, unemployment, inflation, and how government policies can impact these factors. Important macroeconomic issues include why inflation and costs of living increase, why unemployment remains high even during economic recoveries, and what causes recessions and if governments can combat them. Models are used to simplify complex economic realities and show relationships between variables to explain economic behavior and develop policies. Key macroeconomic variables that will be examined are GDP, inflation rates, and unemployment rates.
Macroeconomics examines economies at a large scale by studying aggregate variables such as output, inflation, and unemployment. It analyzes differences between the micro and macro levels. Economists use models to understand relationships between endogenous and exogenous variables in both the short-run, where prices are sticky, and long-run, where prices are flexible and technology evolves.
1. The chapter introduces macroeconomics and the tools used by macroeconomists to study issues like economic growth, unemployment, inflation, and the effects of government policies.
2. Macroeconomic models use simplified representations of the economy to show relationships between variables and explain economic behavior. Assumptions about price flexibility impact whether a model applies to short-run or long-run analysis.
3. Macroeconomics analyzes the whole economy and links microeconomic decisions of households and firms to macroeconomic outcomes. Different models address different issues over different time periods.
Macro economics, G.mankiw, 1-The Science of MacroeconomicsDr. Arifa Saeed
This document provides an introduction to macroeconomics. It discusses important issues studied in macroeconomics like inflation, unemployment, and economic growth. It also introduces some key tools used in macroeconomic analysis, including economic models. An example model of supply and demand for cars is presented to illustrate how macroeconomists use simplified models to show relationships between variables and explain economic behavior. The document emphasizes that different models are needed to study different macroeconomic issues.
This document introduces macroeconomics and the tools used by macroeconomists. It discusses important macroeconomic issues like GDP, inflation, unemployment and recessions. It explains that macroeconomists use simplified models to study relationships between economic variables and to explain overall economic behavior. Models can have flexible or sticky prices, affecting how the economy functions in the short and long run. The goal of macroeconomics is to understand and improve the overall economy.
This chapter introduces macroeconomics and the tools used by macroeconomists. It discusses important macroeconomic issues like economic growth, unemployment, inflation, and recessions. Macroeconomists study indicators like GDP, inflation, and unemployment rates. The chapter outlines the structure of the book, which will cover classical economic theory, growth theory, and business cycle theory. It explains that macroeconomists use models to examine different issues and that these models vary in their treatment of price flexibility.
To develop the candidate understands and ability to apply, analyzes, and interprets the fundamental principles of economics in relation to the business environment both in the domestic and global economies.
This document discusses macroeconomic models, including long-run, medium-run, and short-run models. The long-run model focuses on economic growth and productivity determining output. The medium-run model shows how the economy transitions from short-run to long-run. The short-run model analyzes how output and unemployment fluctuate with demand. Macroeconomics analyzes economic growth, fluctuations, and the impact of policies on goods, labor, and asset markets at an aggregate level.
This document provides an introduction to a macroeconomics module taught at the Foreign Trade University in Vietnam. It outlines the module context, aims, objectives, learning outcomes, teaching methods, and assessment. The module is designed to provide undergraduate students with an understanding of important macroeconomic factors and variables. It will analyze how macroeconomic variables interact in the economy and how economic theories can be used to understand real-world events. Students will learn about macroeconomic policies and different cases of using policies to develop economies. The module will be taught through lectures, discussions, and student assignments and presentations. Students will be assessed based on a written assignment, final exam, and class participation.
Aggregate demand is the total demand for final goods and services in an economy at a given time and price level. It is the sum of consumption, investment, government spending, and net exports. The aggregate demand curve slopes downward, showing that as price levels increase, aggregate output decreases. Aggregate supply is the total supply of goods and services in an economy. In the short run, the aggregate supply curve slopes upward as firms are slow to adjust prices and wages. In the long run, as costs fully adjust, the aggregate supply curve becomes vertical at the natural level of output. Keynesian economics emphasizes that economies may fail to reach full employment without government intervention, due to sticky wages and prices and a tendency for increased savings to reduce
This document provides an overview of macroeconomics and the circular flow of income through several models. It discusses key concepts such as:
1. Macroeconomics studies the economy as a whole by looking at aggregates like total output and income, whereas microeconomics looks at individual units.
2. Common macroeconomic policy objectives are full employment, price stability, economic growth, and balance of payments equilibrium.
3. The circular flow of income can be modeled in a two-sector closed economy with households and firms or a three-sector model that includes government. Savings and investment are incorporated through financial markets to achieve equilibrium.
This document outlines a course on Macroeconomics & Business Environment. The course aims to understand macroeconomic goals, markets, and how policy changes influence business. Key topics include measuring GDP, aggregate demand and supply, unemployment, inflation, fiscal and monetary policy. The course utilizes case studies and has 30 sessions. It aims to explain the economic environment and impacts of macroeconomic policies on business.
This document outlines the content and evaluation of a macroeconomics course. The course covers key macroeconomic concepts like measuring national income, aggregate demand and supply curves, economic fluctuations, unemployment, inflation, and monetary and fiscal policy tools. Students will complete assignments, projects, exams, and a case study analysis. Upon completing the course, students should understand the differences between micro and macroeconomics and the goals and instruments of macroeconomic policy.
This document provides information about getting fully solved assignments from an assistant. It includes contact details to email or call for assistance and provides sample questions on topics like production functions, cost curves, inflation, price and income elasticity, and revenue. Students are instructed to include their semester and specialization when contacting the assistant for help with assignments. Sample questions cover definitions and explanations of economic concepts.
The document discusses macroeconomic goals which include:
1) Full employment at around 5% unemployment
2) Price stability at around 2% inflation
3) Economic growth of around 3% annually (6-7% in China)
4) Balance of payments equilibrium by keeping trade deficits low without a set percentage guideline.
This chapter introduces macroeconomics and the tools used in macroeconomic analysis. It discusses important macroeconomic issues like unemployment, inflation, and recessions. Economists use models to study these issues; models simplify reality by stripping out irrelevant details. A model of supply and demand for cars is presented to illustrate how endogenous and exogenous variables work in a model. The chapter outlines the rest of the book and distinguishes between models that assume flexible prices, describing the long-run economy, versus sticky prices, describing the short-run.
chap 1.Economic model and macro iindicators Mankiw.pptwaleedlink96
This chapter introduces macroeconomics and the key variables of GDP, inflation, and unemployment. The objective is to develop an analytical framework to explain trends in these variables and how government policies can affect them. Models are used to simplify complex economic relationships and analyze how changes in factors like income, prices, and supply/demand influence equilibrium outcomes. The chapter discusses the supply and demand model of the car market as an example and notes the importance of distinguishing endogenous and exogenous variables. It also introduces the concept of price flexibility versus stickiness and how this impacts the economy in the short versus long run.
This chapter introduces macroeconomics and the key issues it addresses such as economic growth, unemployment, inflation, and recessions. It discusses the tools macroeconomists use like economic models to study these issues and simplify complex realities. Models can have flexible or sticky prices to examine long-run or short-run economic behavior. The chapter provides an overview of the topics that will be covered in the book.
This course provides students with an understanding of macroeconomic analysis and application of microeconomic theory. The tentative course outline covers topics such as aggregate supply and demand, money supply and inflation, and unemployment. Students will complete a term paper and presentation analyzing a macroeconomic issue. Assessment includes exams, assignments, and the paper/presentation.
chap 1.Economic model and macro iindicators Mankiw (1).pptmaaidahussain1
This chapter introduces macroeconomics and the goals of the course. It will develop an analytical framework to explain economic growth, unemployment, inflation, and how government policies can impact these factors. Important macroeconomic issues include why inflation and costs of living increase, why unemployment remains high even during economic recoveries, and what causes recessions and if governments can combat them. Models are used to simplify complex economic realities and show relationships between variables to explain economic behavior and develop policies. Key macroeconomic variables that will be examined are GDP, inflation rates, and unemployment rates.
Macroeconomics examines economies at a large scale by studying aggregate variables such as output, inflation, and unemployment. It analyzes differences between the micro and macro levels. Economists use models to understand relationships between endogenous and exogenous variables in both the short-run, where prices are sticky, and long-run, where prices are flexible and technology evolves.
1. The chapter introduces macroeconomics and the tools used by macroeconomists to study issues like economic growth, unemployment, inflation, and the effects of government policies.
2. Macroeconomic models use simplified representations of the economy to show relationships between variables and explain economic behavior. Assumptions about price flexibility impact whether a model applies to short-run or long-run analysis.
3. Macroeconomics analyzes the whole economy and links microeconomic decisions of households and firms to macroeconomic outcomes. Different models address different issues over different time periods.
Macro economics, G.mankiw, 1-The Science of MacroeconomicsDr. Arifa Saeed
This document provides an introduction to macroeconomics. It discusses important issues studied in macroeconomics like inflation, unemployment, and economic growth. It also introduces some key tools used in macroeconomic analysis, including economic models. An example model of supply and demand for cars is presented to illustrate how macroeconomists use simplified models to show relationships between variables and explain economic behavior. The document emphasizes that different models are needed to study different macroeconomic issues.
This document introduces macroeconomics and the tools used by macroeconomists. It discusses important macroeconomic issues like GDP, inflation, unemployment and recessions. It explains that macroeconomists use simplified models to study relationships between economic variables and to explain overall economic behavior. Models can have flexible or sticky prices, affecting how the economy functions in the short and long run. The goal of macroeconomics is to understand and improve the overall economy.
This chapter introduces macroeconomics and the tools used by macroeconomists. It discusses important macroeconomic issues like economic growth, unemployment, inflation, and recessions. Macroeconomists study indicators like GDP, inflation, and unemployment rates. The chapter outlines the structure of the book, which will cover classical economic theory, growth theory, and business cycle theory. It explains that macroeconomists use models to examine different issues and that these models vary in their treatment of price flexibility.
To develop the candidate understands and ability to apply, analyzes, and interprets the fundamental principles of economics in relation to the business environment both in the domestic and global economies.
This document discusses macroeconomic models, including long-run, medium-run, and short-run models. The long-run model focuses on economic growth and productivity determining output. The medium-run model shows how the economy transitions from short-run to long-run. The short-run model analyzes how output and unemployment fluctuate with demand. Macroeconomics analyzes economic growth, fluctuations, and the impact of policies on goods, labor, and asset markets at an aggregate level.
This document provides an introduction to a macroeconomics module taught at the Foreign Trade University in Vietnam. It outlines the module context, aims, objectives, learning outcomes, teaching methods, and assessment. The module is designed to provide undergraduate students with an understanding of important macroeconomic factors and variables. It will analyze how macroeconomic variables interact in the economy and how economic theories can be used to understand real-world events. Students will learn about macroeconomic policies and different cases of using policies to develop economies. The module will be taught through lectures, discussions, and student assignments and presentations. Students will be assessed based on a written assignment, final exam, and class participation.
Aggregate demand is the total demand for final goods and services in an economy at a given time and price level. It is the sum of consumption, investment, government spending, and net exports. The aggregate demand curve slopes downward, showing that as price levels increase, aggregate output decreases. Aggregate supply is the total supply of goods and services in an economy. In the short run, the aggregate supply curve slopes upward as firms are slow to adjust prices and wages. In the long run, as costs fully adjust, the aggregate supply curve becomes vertical at the natural level of output. Keynesian economics emphasizes that economies may fail to reach full employment without government intervention, due to sticky wages and prices and a tendency for increased savings to reduce
This document provides an overview of macroeconomics and the circular flow of income through several models. It discusses key concepts such as:
1. Macroeconomics studies the economy as a whole by looking at aggregates like total output and income, whereas microeconomics looks at individual units.
2. Common macroeconomic policy objectives are full employment, price stability, economic growth, and balance of payments equilibrium.
3. The circular flow of income can be modeled in a two-sector closed economy with households and firms or a three-sector model that includes government. Savings and investment are incorporated through financial markets to achieve equilibrium.
This document outlines a course on Macroeconomics & Business Environment. The course aims to understand macroeconomic goals, markets, and how policy changes influence business. Key topics include measuring GDP, aggregate demand and supply, unemployment, inflation, fiscal and monetary policy. The course utilizes case studies and has 30 sessions. It aims to explain the economic environment and impacts of macroeconomic policies on business.
This document outlines the content and evaluation of a macroeconomics course. The course covers key macroeconomic concepts like measuring national income, aggregate demand and supply curves, economic fluctuations, unemployment, inflation, and monetary and fiscal policy tools. Students will complete assignments, projects, exams, and a case study analysis. Upon completing the course, students should understand the differences between micro and macroeconomics and the goals and instruments of macroeconomic policy.
This document provides information about getting fully solved assignments from an assistant. It includes contact details to email or call for assistance and provides sample questions on topics like production functions, cost curves, inflation, price and income elasticity, and revenue. Students are instructed to include their semester and specialization when contacting the assistant for help with assignments. Sample questions cover definitions and explanations of economic concepts.
The document discusses macroeconomic goals which include:
1) Full employment at around 5% unemployment
2) Price stability at around 2% inflation
3) Economic growth of around 3% annually (6-7% in China)
4) Balance of payments equilibrium by keeping trade deficits low without a set percentage guideline.
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2. CHAPTER 3 National Income
CHAPTER 1 The Science of Macroeconomics
IN THIS CHAPTER, YOU WILL LEARN:
About the issues
macroeconomists study
About the tools
macroeconomists use
Some important concepts in
macroeconomic analysis
3. Important issues in macroeconomics Part 1
Macroeconomics—the study of the economy as a whole—
addresses many topical issues, such as:
What causes recessions? What is “government stimulus,”
and why might it help?
How can problems in the housing market spread to the rest
of the economy?
What is the government budget deficit? How does it affect
workers, consumers, businesses, and taxpayers?
4. Important issues in macroeconomics Part 2
Macroeconomics—the study of the economy as a whole—
addresses many topical issues, such as:
Why does the cost of living keep rising?
Why are so many countries poor? What policies might help
them grow out of poverty?
What is the trade deficit? How does it affect a country’s well-
being?
8. Economic models
…are simplified versions of more complex realities
with irrelevant details stripped away
…are used to:
show relationships between variables
explain the economy’s behavior
devise policies to improve economic performance
9. Example of a model: Supply and demand for new cars
Shows how various events affect the price and quantity of
cars
Assumes the market is competitive: Each buyer and seller is
too small to affect the market price
Variables
Qd = quantity of cars that buyers demand
Qs = quantity of cars that producers supply
P = price of new cars
Y = aggregate income
Ps = price of steel (an input)
10. The demand for cars
Demand equation: Q d = D (P, Y )
Shows that the quantity of cars consumers demand is
related to the price of cars and aggregate income
11. Digression: Functional notation
General functional notation
Shows only that the variables are related.
Qd = D(P, Y) The list of
variables that
affect QD
A specific functional form shows the precise
quantitative relationship.
Example:
D (P, Y ) = 60 – 10P + 2Y
12. The market for cars: Demand
Demand equation:
Qd = D(P, Y)
The demand curve
shows the relationship
between quantity
demanded and price,
other things equal.
13. The market for cars: Supply
Supply equation:
Qs = S(P, PS)
The supply curve
shows the relationship
between quantity
supplied and price,
other things equal.
15. The effects of an increase in income
Demand equation:
Qd = D(P, Y)
An increase in income
increases the quantity
of cars consumers
demand at each price…
…which increases
the equilibrium price
and quantity.
16. The effects of a steel price increase
Supply equation:
Qs = S(P, PS)
An increase in Ps
reduces the quantity of
cars producers supply at
each price…
…which increases
the market price and
reduces the quantity.
17. Endogenous versus exogenous variables
The values of endogenous variables are determined in the
model.
The values of exogenous variables are determined outside
the model: The model takes their values and behaviors
as given.
In the model of supply and demand for cars,
endogenous variables: P, Qd, Qs
exogenous variables: Y, Ps
18. NOW YOU TRY
Supply and demand
1. Write down demand and supply equations for
smartphones, include two exogenous variables in each
equation.
2. Draw a supply–demand graph for smartphones and
identify the equilibrium price and quantity.
3. Use your graph to show how a change in one of your
exogenous variables affects the model’s endogenous
variables.
19. The use of multiple models, part 1
No single model can address all the issues we care about.
For example, our supply–demand model of the car market:
• can tell us how a fall in aggregate income affects price
and quantity of cars
• cannot tell us why aggregate income falls
20. The use of multiple models, part 2
We will learn different models for studying different issues
(e.g., unemployment, inflation, long-run growth).
For each new model, you should keep track of:
• its assumptions
• which variables are endogenous and which are
exogenous
• the questions it can help us understand and those it
cannot
21. Prices: Flexible versus sticky, part 1
Market clearing: An assumption that prices are flexible and
adjust to equate supply and demand.
In the short run, many prices are sticky—adjust sluggishly
in response to changes in supply or demand. For example:
• many labor contracts fix the nominal wage for a year
or longer
• many magazine publishers change prices only once
every 3 to 4 years
22. Prices: Flexible versus sticky, part 2
The economy’s behavior depends partly on whether prices
are sticky or flexible:
• If prices are sticky (short run), demand may not equal
supply, which explains:
• unemployment (excess supply of labor)
• why firms cannot always sell all the goods they
produce
• If prices are flexible (long run), markets clear, and the
economy behaves very differently.
23. Outline of this book (1 of 2)
Introductory material (Chapters 1, 2)
Classical theory (Chapters 3–7)
How the economy works in the long run, when prices are
flexible
Growth theory (Chapters 8–10)
The standard of living and its growth rate over the very long
run
Business cycle theory (Chapters 11–15)
How the economy works in the short run, when prices are
sticky
24. Outline of this book (2 of 2)
Macroeconomic theory (Chapters 16–18)
Macroeconomic dynamics, models of consumer behavior,
theories of firms’ investment decisions
Macroeconomic policy (Chapters 19–20)
Stabilization policy, government debt and deficits, financial
crises
25. CHAPTER 3 National Income
CHAPTER 1 The Science of Macroeconomics
C H A P T E R S U M M A R Y , P A R T 1
Macroeconomics is the study of the economy as a
whole, including:
growth in incomes
changes in the overall level of prices
the unemployment rate
Macroeconomists attempt to explain the economy and to
devise policies to improve its performance.
26. CHAPTER 3 National Income
CHAPTER 1 The Science of Macroeconomics
C H A P T E R S U M M A R Y , P A R T 2
Economists use different models to examine different
issues.
Models with flexible prices describe the economy in
the long run; models with sticky prices describe the
economy in the short run.
Macroeconomic events and performance arise from
many microeconomic transactions, so
macroeconomics uses many of the tools of
microeconomics.
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