Macroeconomics

Study Notes

Gross Domestic Product (GDP): total value of goods and services produced within a country's borders
Inflation: sustained increase in general price level of goods and services in an economy over time
Unemployment: number of people able and willing to work, but unable to find employment
Fiscal Policy: use of government spending and taxation to influence overall level of economic activity
Monetary Policy: actions of central bank to control money supply and interest rates to promote economic growth

Economic Growth: sustained increase in production of goods and services over time
Price Stability: low and stable rate of inflation
Full Employment: maximum number of people employed, with minimal unemployment
Balance of Payments: equilibrium in international transactions, avoiding large trade deficits or surpluses

Classical Theory: assumes free market allocates resources efficiently, with minimal government intervention
Keynesian Theory: emphasizes government intervention to stabilize economy during periods of economic downturn
Monetarist Theory: focuses on control of money supply to regulate economic activity

GDP Growth Rate: percentage change in GDP over a specific period
Inflation Rate: percentage change in general price level over a specific period
Unemployment Rate: percentage of labor force unable to find employment
Interest Rates: rates at which borrowers borrow and lenders lend money

Macroeconomics studies economy-wide phenomena, focusing on aggregates and averages to examine the economy's performance, structure, and behavior as a whole.

Gross Domestic Product (GDP): measures the total value of goods and services produced within a country's borders.
Inflation: a sustained increase in the general price level of goods and services in an economy over time, reducing purchasing power.
Unemployment: the number of people able and willing to work, but unable to find employment, affecting economic growth and stability.
Fiscal Policy: involves government spending and taxation to influence the overall level of economic activity, stabilizing the economy.
Monetary Policy: actions of the central bank to control the money supply and interest rates to promote economic growth and stability.

Economic Growth: a sustained increase in the production of goods and services over time, improving living standards.
Price Stability: maintaining a low and stable rate of inflation, promoting economic certainty.
Full Employment: achieving the maximum number of people employed, with minimal unemployment, to optimize resource utilization.
Balance of Payments: maintaining equilibrium in international transactions, avoiding large trade deficits or surpluses.

Classical Theory: assumes the free market allocates resources efficiently, with minimal government intervention, promoting economic growth.
Keynesian Theory: emphasizes government intervention to stabilize the economy during periods of economic downturn, stimulating aggregate demand.
Monetarist Theory: focuses on controlling the money supply to regulate economic activity, maintaining low inflation and stable economic growth.

GDP Growth Rate: measures the percentage change in GDP over a specific period, indicating economic growth or contraction.
Inflation Rate: measures the percentage change in the general price level over a specific period, indicating price stability or instability.
Unemployment Rate: measures the percentage of the labor force unable to find employment, indicating labor market conditions.
Interest Rates: affect borrowing and lending decisions, influencing consumption and investment, and ultimately, economic growth.