Macroeconomics Study Notes

Economy Study Notes

Macroeconomics

• Study of the economy as a whole, focusing on aggregate variables and issues
• Examines the behavior and performance of entire economies, including:
  • Economic growth and development
  • Inflation and deflation
  • Unemployment and employment rates
  • International trade and finance
  • Fiscal and monetary policies

Key concepts:

• Gross Domestic Product (GDP): total value of goods and services produced within a country's borders
• Gross National Product (GNP): total value of goods and services produced by a country's citizens, regardless of location
• Inflation rate: percentage change in general price level of goods and services
• Unemployment rate: percentage of labor force unable to find work

Microeconomics

• Study of individual economic units, such as:
  • Households (consumers)
  • Firms (producers)
  • Markets
• Examines the behavior and decision-making processes of these units, including:
  • Supply and demand
  • Opportunity cost
  • Consumer behavior and preferences
  • Production and cost theory

Key concepts:

• Law of Supply: as price increases, quantity supplied also increases
• Law of Demand: as price decreases, quantity demanded increases
• Market equilibrium: point at which supply equals demand
• Elasticity: measure of responsiveness of quantity demanded or supplied to changes in price or other variables

Economy Study Notes

Macroeconomics

• The economy as a whole is the focus of macroeconomics, with attention on aggregate variables and issues.
• Macroscopic issues include economic growth and development, inflation and deflation, employment, and international trade and finance.
• Fiscal and monetary policies are also examined in macroeconomics.
• Gross Domestic Product (GDP) is the total value of goods and services produced within a country's borders.
• Gross National Product (GNP) is the total value of goods and services produced by a country's citizens, regardless of location.
• The inflation rate is the percentage change in the general price level of goods and services.
• The unemployment rate is the percentage of the labor force unable to find work.

Microeconomics

• Microeconomics focuses on individual economic units, including households (consumers), firms (producers), and markets.
• The study of microeconomics examines the behavior and decision-making processes of these individual units.
• Supply and demand, opportunity cost, consumer behavior, and production and cost theory are all key aspects of microeconomics.
• The Law of Supply states that as price increases, quantity supplied also increases.
• The Law of Demand indicates that as price decreases, quantity demanded increases.
• Market equilibrium occurs when supply equals demand.
• Elasticity is a measure of responsiveness to changes in price or other variables, and is used to measure the responsiveness of quantity demanded or supplied.

Explore the study of the economy as a whole, covering aggregate variables and issues such as economic growth, inflation, unemployment, and fiscal policies. Learn key concepts like GDP and GNP.