Homework 1 - Worksheet 1 What is Macroeconomics?...

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Worksheet 1 – What is Macroeconomics? Unemployment, Inflation and Growth Introduction to Macroeconomics Econ 104a,c,d,e,f - Spring 2011 Due 2/5, Saturday, by 5pm. Email to either 104a@econs.umass.edu or 104c@econs.umass.edu , with your TA’s name in the subject line. Vincent Cheung 1. What is macroeconomics? When did it become important in economics? Macroeconomics is the operation and health of an entire economy. It is the branch of economics that deals with large economic aggregates including GDP, total employment, overall price level, and how these are determined. It became important in economics since World War II. 2. How did the Great Depression Affect the way we think about the economy and the role of government? Today, how are we rethinking government’s role? What do you think? The Great Depression affected the way we think about the economy because during the Great Depression, the stock market crashed, 9000 US banks failed, there was a 25% unemployment rate in the US (about 12.5 million people unemployed out of a labor force of about 50 million), and the overall GDP fell by about 25%. Due to the Great Depression, the US government decided to play a bigger role in controlling and regulating the economy. The government decided that it is their responsibility to promote maximum employment, production, and purchasing power through key acts and developments including the FDIC (Federal Deposit Insurance Corporation), Social Security, and the Employment Act. Today, we are rethinking government’s role by debating the addition of more government regulations including healthcare reform, tax
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Homework 1 - Worksheet 1 What is Macroeconomics?...

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