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1. Intro macro.ppt - Introduction to Macroeconomics...

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Introduction toMacroeconomics
Foundations of EconomicsEconomics is derived from the word economy.Economy - The wealth and resources of a nation,especially in terms of the production andconsumption of goods and services.Economics - A social science that studies howindividuals, households, firms and governments,make choices about allocating scarce resourcesto satisfy their unlimited wants.
Foundations of EconomicsTo produce any product we need resources:Resources:Land.Labour.Capital.Enterprise.All these resources are limited or scarce.If these resources were not scarce, therewould be no need of studying economics.
Foundations of EconomicsLand – Common name given to all NaturalResources. (Forests, Fisheries, Farms &Mines. )Labour – Common name given to all HumanResources.Capital – Common name given to all man –made productive assets.Enterprise – Common name given to allenterprising (risk taking) skills.
Basic economic problemScarcity - means that society has limitedresources and therefore cannot produce allthe goods and services people wish to have.ChoiceNeeds and wants of human beings areunlimited and resources to fulfill these needsand wants are limited.So, economics is the study of how societymanages its scarce resources.
Introduction toMacroeconomicsMicroeconomicsexamines the behavior ofindividual decision-making units—business firms andhouseholds.Macroeconomicsdeals with the economy as awhole; it examines the behavior of economicaggregates such as aggregate income, consumption,investment, and the overall level of prices.Aggregate behaviorrefers to the behavior of allhouseholds and firms together.
What do Macroeconomistsdo?Macroeconomists try to forecast economicconditions to help consumers, firms andgovernments make better decisions.Consumers want to know how easy it will be tofind work, how much it will cost to buy goods andservices in the market, or how much it may costto borrow money.

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Term
Winter
Professor
N/A
Tags
Economics, Macroeconomics, Goods and Services, Keynesian economics

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