1、CHAPTER 1Introduction to MacroeconomicsQuestions How much richer are we than our parents?How much richer will our children be than our grandparents were?Will changing jobs be easy or hard in five years?How many of us will have jobs in five years?Questions Will the businesses we work for vanish as de
2、mand for the products they make dries up?Will inflation make us poor by destroying our savings or rich by eliminating our debts?Macroeconomics.is the subdiscipline of economics that tries to answer these six questions is the branch of economics related to the economy as a wholeMacroeconomists.try to
3、 figure out why overall economic activity rises and falls try to understand what determines the level and rate of change of the price level study other variables that play a major role in determining the overall levels of production,income,employment,and pricesWhy Macroeconomics Matters Cultural Lit
4、eracyability to follow and participate in public debates and discussionsunderstanding of news reports on changes in the economyFigure 1.1-The Daily Flow of Economic NewsWhy Macroeconomics Matters Self-Interesteffects of macroeconomy on our daily livesunderstanding of changing opportunities as the ec
5、onomy fluctuatesWhy Macroeconomics Matters Civic Responsibilitymore informed votingmore responsible macroeconomic policyMacroeconomic Policy Growth Policypolicies to accelerate or decelerate long-run economic growthmost important policies for the long-runFigure 1.2-Long-Run Economic Growth:Sweden an
6、d Argentina,1900-2000Macroeconomic Policy Stabilization Policypolicies to smooth out the business cycle by diminishing the depth of recessions and depressionsbusiness cycles are fluctuations in production and employment booms or expansions occur when production grows and unemployment falls recession
7、s or depressions occur when production falls and unemployment risesFigure 1.3-The American Business Cycle:Fluctuations in Total Production Relative to the Long-Run Growth TrendMacroeconomics versus Microeconomics Macroeconomistsexamine the economy as a wholefocus on the feedback from one component o
8、f the economy to anotherstudy the total level of production and employmentbelieve that imbalances between supply and demand may be resolved by changes in quantities rather than pricesMacroeconomics versus Microeconomics Microeconomistsstudy the markets for single commodities and the behavior of indi
9、vidual households and firmsfocus on how competitive markets allocate resources to create consumer and producer surplusassume that imbalances between demand and supply are resolved by changes in pricesEconomic Statistics and Economic Activity Economic activity is the pattern of transactions in which
10、things of real,useful value are created,transformed,and exchanged.National Income and Product Accounts(NIPA)reported by the U.S.Commerce Departments Bureau of Economic AnalysisTable 1.2-The Flow of Economic Data,2000-2001Six Key Economic Variables Real Gross Domestic Product(GDP)is corrected for cha
11、nges in the price level(real)includes the replacement of worn-out and obsolete equipment and structures as well as new investment(gross)counts economic activity that happens in the United States(domestic)represents the production of final goods and services(product)Six Key Economic Variables Real Gr
12、oss Domestic Productoften divided by the number of workers in the economymeasures how well the economy produces goods and services that people find usefuldoes not indicate the relative distribution of the nations economic productis an imperfect measure of economic well-beingFigure 1.4-Officially Mea
13、sured Real GDP per Worker in the United StatesSix Key Economic Variables The Unemployment Rateto be unemployed,a person must want to work and be actively looking for a job(but have not yet found one)the labor force consists of those who are employed and those who are unemployedthe unemployment rate
14、is equal to the number of unemployed people divided by the labor forceFigure 1.5-The U.S.Unemployment RateSix Key Economic Variables The Unemployment Ratefrictional unemployment occurs because workers and firms spend time searching for the best matchcyclical unemployment occurs during recessions and
15、 depressionsthe unemployment rate is the best indicator of how well the economy is doing relative to its productive potentialSix Key Economic Variables The Inflation Rateis a measure of how fast the overall price level is risinghyperinflation occurs when the price level is rising by more than 20%per
16、 monthFigure 1.6-Inflation in the United StatesSix Key Economic Variables The Interest Rateis important because it governs the redistribution of purchasing power across timethe many different interest rates in the economy vary by duration and degree of risk often move up and down togetherSix Key Eco
17、nomic Variables The Interest Ratenominal interest rate is the interest rate in terms of money does not take into account the effects of inflationreal interest rate is the interest rate in terms of goods and services does take into account the effects of inflationFigure 1.7-U.S.Real Interest Rates,19
18、60-1999Six Key Economic Variables The Stock Marketis heard about most often(every day)is an index of expectations for the future a high value means that investors expect economic growth to be rapid,profits to be high,and unemployment to be lowFigure 1.8-Real Stock Index PricesSix Key Economic Variab
19、les The Exchange Rategoverns the terms on which international trade and investment take placenominal exchange rate is the rate at which monies of different countries can be exchanged for one anotherreal exchange rate is the rate at which the goods and services produced in different countries can be
20、exchanged for one anotherSix Key Economic Variables The Exchange Rateif domestic currency appreciates its value in terms of other currencies increases foreign-produced goods are relatively cheap for domestic buyers imports are likely to be high domestic-made goods are relatively expensive for foreig
21、ners exports are likely to be lowSix Key Economic Variables The Exchange Rateif domestic currency depreciates its value in terms of other currencies declines domestic-produced goods are relatively cheap for foreign buyers exports are likely to be high foreign-made goods are relatively expensive for
22、domestic buyers imports are likely to be lowFigure 1.9-The U.S.Real Exchange Rate:The Dollar against a Composite Indexof Foreign CurrenciesThe CurrentMacroeconomic Situation The United States-2001economic growth has slowed to a very weak pace forecast for 2001 is that real GDP will grow by no more t
23、han 1.8%interest rates lowered through Fed policy due to lags,effects of lower interest rates will not be felt until end of 2001(at the earliest)inflation continues to be lowThe CurrentMacroeconomic Situation The United States-recent pastfrom early 1990s to 2000,there was an economic boomunemploymen
24、t fell during the 1990s lowest unemployment rate in two decades(4%)real wages increased only slightly helped to keep inflation lowThe CurrentMacroeconomic Situation Europeeconomic growth in countries belonging to the European Monetary Union slowinglow inflation less than 2%per yearrelatively high un
25、employment near 10%The CurrentMacroeconomic Situation Japanslow growth rate real GDP grew only 1.8%in 2000 real GDP is expected to grow only by 1.4%in 2001deflation is occurring the overall price level fell by 0.7%in 2000Chapter Summary Macroeconomics is the study of the overall economy.There are th
26、ree key reasons to study macroeconomicsto gain cultural literacyto understand how economic trends affect you personallyto exercise your responsibility as a voter and citizenChapter Summary The key indicators in macroeconomics arereal GDPthe unemployment ratethe inflation ratethe interest ratethe level of the stock marketthe exchange rate
