Week_1 - ECMA06 Introduction 1 ECMA06 Introduction to...

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ECMA06 – Introduction 1 ECMA06 Introduction to Macroeconomics: A Mathematical Approach Winter 2010
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ECMA06 – Introduction 2 About the Course Coordinator: Ata Mazaheri Text: Christopher T. S. Ragan and Richard G. Lipsey, Macroeconomics, 12 th Canadian edition, Pearson Addison Wesley, 2008 Class format: o Lectures: Taped lectures will be made available online on a weekly basis. * o Tutorial: Throughout the week (starting next week) *Lecture notes, are posted weekly on the Portal. These notes are the summarized version of the web-streamed lectures. By matching these notes with the online lectures you will be able to follow the material seamlessly. You are expected to login to your Blackboard account on a regular basis and download the materials on a weekly basis. Grading: Midterm 1/3 of the overall grade Final Exam 2/3 of the overall grade
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ECMA06 – Introduction 3 If you do better in the final exam, your midterm marks will be replaced by your final exam marks (i.e., your final exam will count for 100%). Need help for the course? The TAs are your first option. TA office: MW 369 My Office hours: Wednesday: 11-1PM, 4-6PM Thursday: 2-3.30PM, Friday: 12-1PM
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ECMA06 – Introduction 4 Outline What is macroeconomics? Unemployment – unemployment rate & labour force participation rate Inflation – CPI & GDP Deflator What is Macroeconomics? While microeconomics is about a specific market , macroeconomics is about the economy as a whole (i.e. the aggregates ). In macroeconomics, we look at the things like: national income, level of unemployment, inflation rate, the exchange rate, etc. Macroeconomics is not simply a matter of adding things up, because the dynamics are different!
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ECMA06 – Introduction 5 Example 1: Unemployment A simple microeconomic approach to unemployment: Wage (w) Qty of labour Question: What is special about the microeconomic approach? Answer:
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ECMA06 – Introduction 6 We know there is unemployment, and sometimes it can be very serious. The Great Depression of the 1930s Recessions of early 1980s & 1990s. Example 2: Inflation – % in the general price level A microeconomic approach to inflation involves two markets and a shift in demand. P X S X P Y S Y D 0 X D 0 Y X Y Suppose D X Y :
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ECMA06 – Introduction 7 Question: What is special about the microeconomic approach? Answer: We know there is inflation, and sometimes it can be very serious. In the 1950s, the 70’s and early 80’s, inflation in Canada approaching & sometimes exceeding 10% per year. In other countries it has sometimes been over 100% per year. Sometimes, inflation has gone completely wacky, destroying the currency, with prices changing hourly (hyperinflation). Question:
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This note was uploaded on 06/18/2011 for the course ECMA 06 taught by Professor Dr.atamazaheri during the Spring '10 term at University of Toronto.

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Week_1 - ECMA06 Introduction 1 ECMA06 Introduction to...

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