Lecture 2 - Economics 102 Lecture 2: An Overview of...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Economics 102 Lecture 2 : An Overview of Macroeconomics LECTURE 2 AN OVERVIEW OF MACROECONOMICS 1 What will your world be like? § Will tomorrow’s world be more prosperous than today’s? § Will jobs be plentiful? § Will the cost of living be stable? § Will the government’s and the nation’s deficits continue to increase? § What macroeconomic policy tools does the government have to steer the course of the economy? LECTURE 2 AN OVERVIEW OF MACROECONOMICS 2 Origins and Issues of Macroeconomics § Economists began to study economic growth, inflation, and international payments during the 1750s § Modern macroeconomics dates from the Great Depression , a decade (1929-1939) of high unemployment and stagnant production throughout the world economy. § John Maynard Keynes book, The General Theory of Employment, Interest, and Money , began the subject.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 LECTURE 2 AN OVERVIEW OF MACROECONOMICS 3 Origins and Issues of Macroeconomics § Short-Term Versus Long-Term Goals Keynes focused on the short-term— on unemployment and lost production . “In the long run,” said Keynes, “we’re all dead.” During the 1970s and 1980s, macroeconomists became more concerned about the long-term inflation and economic growth. LECTURE 2 AN OVERVIEW OF MACROECONOMICS 4 Economic Growth and Fluctuations § Economic growth is the expansion of the economy’s production possibilities—an outward shifting PPF . § We measure economic growth by the increase in real GDP. § Real GDP ( real gross domestic product ) is the value of the total production of all the nation’s farms, factories, shops, and offices, measured in the prices of a single year. LECTURE 2 AN OVERVIEW OF MACROECONOMICS 5 Economic Growth and Fluctuations Economic Growth in the United States The figure highlights: Growth of potential GDP Fluctuations of real GDP around potential GDP The figure shows real GDP in the United States from 1960 to 2005.
Background image of page 2
3 LECTURE 2 AN OVERVIEW OF MACROECONOMICS 6 Economic Growth and Fluctuations § Potential GDP is the value of real GDP when all the economy’s resources are fully employed. § During the 1970s and
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 11

Lecture 2 - Economics 102 Lecture 2: An Overview of...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online