Chapter 1

Chapter 1 - • Stock Quantity measured at a given point in...

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Chapter 1 Macroeconomics: the study of the economy as a whole Real GDP: measures the total income of everyone in the economy (adjusted for the level of prices) Inflation: measures how fast prices are rising Unemployment: measures fraction of labor force that is out of work Recessions: repeated periods during which real GDP falls Deflation: periods of falling prices Endogenous variables: those that a model tries to explain Exogenous variables; those that a model accepts as given
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Unformatted text preview: • Stock: Quantity measured at a given point in time o Examples: wealth, number of people employed, amount of capital in the economy, government debt • Flows: Quantity measured per unit of time, amount of capital in the economy, o Examples: income, expenditure, number of people losing their jobs, amount of investment, government budget deficit • Microeconomics: the study of how households and firms make decisions and how these decisionmakers interact in the marketplace...
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