Chapter 01 - CHAPTE R 1 The Science of Macroeconomics...

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M M ACROECONOMICS ACROECONOMICS C H A P T E R SIXTH EDITION SIXTH EDITION N N G G REGORY  REGORY  M M ANKIW ANKIW The Science of Macroeconomics 1
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slide 2 CHAPTER 1 The Science of Macroeconomics Learning Objectives This chapter introduces you to the issues macroeconomists study the tools macroeconomists use some important concepts in macroeconomic analysis
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slide 3 CHAPTER 1 The Science of Macroeconomics Important issues in  macroeconomics Why does the cost of living keep rising? Why are millions of people unemployed, even when the economy is booming? What causes recessions? Can the government do anything to combat recessions? Should it? Macroeconomics , the study of the economy as a whole, addresses many topical issues:
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slide 4 CHAPTER 1 The Science of Macroeconomics Important issues in  macroeconomics What is the government budget deficit? How does it affect the economy? Why does the U.S. have such a huge trade deficit? Why are so many countries poor? What policies might help them grow out of poverty? Macroeconomics , the study of the economy as a whole, addresses many topical issues:
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slide 5 CHAPTER 1 The Science of Macroeconomics 0 10,000 20,000 30,000 40,000 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 U.S. Real GDP per capita  (2000 dollars) Great Depression World War II First oil price shock Second oil price shock long-run upward trend… 9/11/2001
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slide 6 CHAPTER 1 The Science of Macroeconomics U.S. inflation rate (% per year) -15 -10 -5 0 5 10 15 20 25 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
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slide 7 CHAPTER 1 The Science of Macroeconomics U.S. unemployment rate (% of labor force) 0 5 10 15 20 25 30 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
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slide 8 CHAPTER 1 The Science of Macroeconomics Why learn macroeconomics? 1. The macroeconomy affects society’s well-being. Each one-point increase in the unemployment rate is associated with: 920 more suicides 650 more homicides 4000 more people admitted to state mental institutions 3300 more people sent to state prisons 37,000 more deaths increases in domestic violence and homelessness
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Why learn macroeconomics? 2. The macroeconomy affects your well-being.
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Chapter 01 - CHAPTE R 1 The Science of Macroeconomics...

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