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The word ______ comes from the Greek word oikonomos, which means 'one who manages a household'.
The word ______ comes from the Greek word oikonomos, which means 'one who manages a household'.
economy
The management of society's resources is important because resources are ______.
The management of society's resources is important because resources are ______.
scarce
[Blank] is the study of how society manages its scarce resources.
[Blank] is the study of how society manages its scarce resources.
Economics
In most societies, resources are allocated not by an all-powerful dictator but through the combined actions of millions of ______ and firms.
In most societies, resources are allocated not by an all-powerful dictator but through the combined actions of millions of ______ and firms.
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A household must allocate its ______ resources among its various members.
A household must allocate its ______ resources among its various members.
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Economists study how people make decisions: how much they ______, what they buy, how much they save, and how they invest their savings.
Economists study how people make decisions: how much they ______, what they buy, how much they save, and how they invest their savings.
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Like a ______, a society faces many decisions.
Like a ______, a society faces many decisions.
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Each individual in a society cannot attain the highest standard of living to which he or she might ______.
Each individual in a society cannot attain the highest standard of living to which he or she might ______.
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Macroeconomic performance relies on measures of economic activity, focusing on variables and data at the national level within a specific ______ of time.
Macroeconomic performance relies on measures of economic activity, focusing on variables and data at the national level within a specific ______ of time.
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One of the major objectives of macroeconomics is to achieve ______ employment.
One of the major objectives of macroeconomics is to achieve ______ employment.
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To economists, ______ employment means that unemployment has fallen to the lowest possible level that won't cause inflation.
To economists, ______ employment means that unemployment has fallen to the lowest possible level that won't cause inflation.
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Price ______ stability denotes that consumer spending is not affected by inflation because consumers do not worry that the value of money will change anytime soon.
Price ______ stability denotes that consumer spending is not affected by inflation because consumers do not worry that the value of money will change anytime soon.
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Macroeconomics entails analyses of aggregate measures such as national income, national output, ______ rates, and business cycle fluctuations.
Macroeconomics entails analyses of aggregate measures such as national income, national output, ______ rates, and business cycle fluctuations.
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According to Classical economists, ______ employment is a situation where there is no involuntary unemployment.
According to Classical economists, ______ employment is a situation where there is no involuntary unemployment.
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The balance of ______ is one of the major objectives of macroeconomics.
The balance of ______ is one of the major objectives of macroeconomics.
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Macroeconomic performance relies on measures of economic activity, focusing on variables and data at the national level within a specific period of ______.
Macroeconomic performance relies on measures of economic activity, focusing on variables and data at the national level within a specific period of ______.
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The study of macroeconomics focuses on how a country's economy works while trying to discern among good, better, and best choices for improving and/or maintaining a nation's standard of living and level of economic and _______________ well-being.
The study of macroeconomics focuses on how a country's economy works while trying to discern among good, better, and best choices for improving and/or maintaining a nation's standard of living and level of economic and _______________ well-being.
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Macroeconomics focuses on changes in the _______________ level across all markets.
Macroeconomics focuses on changes in the _______________ level across all markets.
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A study of macroeconomics situates itself around a number of goals including economic growth, _______________, and full employment.
A study of macroeconomics situates itself around a number of goals including economic growth, _______________, and full employment.
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Macroeconomics examines forces and trends that affect the economy as a whole, including the growth in average income, the fraction of the population that cannot find work, and the rate at which prices are _______________.
Macroeconomics examines forces and trends that affect the economy as a whole, including the growth in average income, the fraction of the population that cannot find work, and the rate at which prices are _______________.
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One goal of macroeconomics is to achieve _______________ employment.
One goal of macroeconomics is to achieve _______________ employment.
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Historical and contemporary perspectives on the roles and policies of government are part of the mix of interpretations and alternatives that surround questions of who or what gains and loses the most or least within a relatively small set of key interdependent players in terms of _______________ policy.
Historical and contemporary perspectives on the roles and policies of government are part of the mix of interpretations and alternatives that surround questions of who or what gains and loses the most or least within a relatively small set of key interdependent players in terms of _______________ policy.
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The study of macroeconomics focuses on the economy as a whole, including the growth in average income, and the rate at which prices are rising, which is related to _______________ policy.
The study of macroeconomics focuses on the economy as a whole, including the growth in average income, and the rate at which prices are rising, which is related to _______________ policy.
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Economics is traditionally divided into two parts: microeconomics and _______________.
Economics is traditionally divided into two parts: microeconomics and _______________.
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Study Notes
Introduction to Macroeconomics
- The word "economy" originates from the Greek word "oikonomos", meaning "one who manages a household".
- Households and economies face similar decisions, such as allocating scarce resources among members, taking into account abilities, efforts, and desires.
Scarcity and Economics
- Scarcity means society has limited resources and cannot produce all the goods and services people want.
- Economics is the study of how society manages its scarce resources through the combined actions of households and firms.
Macroeconomics
- Macroeconomic performance relies on measures of economic activity at the national level, focusing on variables and data within a specific period.
- Macroeconomics entails analyses of aggregate measures, such as national income, national output, unemployment and inflation rates, and business cycle fluctuations.
Objectives of Macroeconomics
- The four major objectives of macroeconomics are:
- Full employment
- Price stability
- A high, but sustainable, rate of economic growth
- Keeping the balance of payments in equilibrium
Full Employment
- Full employment refers to a situation where every able-bodied person willing to work at the prevailing rate of wages is employed.
- Full employment means unemployment has fallen to the lowest possible level that won't cause inflation.
- Classical economists and Keynes define full employment differently, with Classical economists viewing it as a situation with no involuntary unemployment, and Keynes viewing it as the level of employment where an increase in aggregate demand doesn't lead to an increase in output and employment.
Price Stability
- Price level stability means consumers are not affected by inflation and do not worry that the value of money will change soon.
- Economists examine how the multitude of buyers and sellers of a good together determine the price at which the good is sold and the quantity that is sold.
Microeconomics vs. Macroeconomics
- Economics is traditionally divided into two parts: microeconomics and macroeconomics.
- Microeconomics focuses on how supply and demand within a given market determine prices, while macroeconomics focuses on changes in the price level across all markets.
- Macroeconomics situates itself around goals including economic growth, price stability, and full employment, whereas microeconomics orients itself toward firm profit maximization and output optimization, as well as consumer utility maximization and consumption optimization.
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Description
Learn about the basics of macroeconomics, from the origin of the word 'economy' to the similarities between households and economies, and the decision-making processes involved.
