Chapter 5


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Introduction to Macroeconomics CHAPTER OVERVIEW This chapter previews economic growth, the business cycle, unemployment, and  inflation. It sets the stage for the analytical presentation in later chapters. Monetary and  Fiscal Policies are defined. The business cycle is introduced in historical perspective  and is presented in stylized form (Figure 5-3). While hinting at various business cycle  theories, the authors stress the general belief that changes in aggregate spending,  especially durable goods and investment spending, are the immediate cause of  economic instability. Non-cyclical fluctuations are also treated briefly before the analysis  of unemployment and inflation. In the section on unemployment a historical comparison of unemployment rates and is  presented. Inflation is accorded historical the same historical treatment. Cases of extreme inflation  are discussed, reminding students that inflationary fears have some basis in fact. COMMENTS
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This note was uploaded on 06/15/2010 for the course EC 141DLC taught by Professor Antonifirner during the Fall '09 term at Park.

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