ch%201 - MACROECONOMICS N.GregoryMankiw CHAPTE R 1 The S c...

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1 CHAPTER 1 The Science of Macroeconomics MACROECONOMICS N. Gregory Mankiw C H A P T E R The Science of Macroeconomics 1
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2 CHAPTER 1 The Science of Macroeconomics Important issues in macroeconomics § What causes recessions? What is “government stimulus” and why might it help? § How can problems in the housing market spread to the rest of the economy? § What is the government budget deficit? How does it affect workers, consumers, businesses, and taxpayers? Macroeconomics , the study of the economy as a whole, addresses many topical issues, e.g. :
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3 CHAPTER 1 The Science of Macroeconomics Important issues in macroeconomics § Why does the cost of living keep rising? § Why are so many countries poor? What policies might help them grow out of poverty? § What is the trade deficit? How does it affect the country’s well-being? Macroeconomics , the study of the economy as a whole, addresses many topical issues, e.g. :
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4 CHAPTER 1 The Science of Macroeconomics U.S. Real GDP per capita  (2000 dollars) long-run upward trend… Great Depression World War II First oil price shock Second oil price shock 9/11/2001
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5 CHAPTER 1 The Science of Macroeconomics U.S. Inflation Rate (% per year)
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6 CHAPTER 1 The Science of Macroeconomics U.S. Unemployment Rate (% of labor force)
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7 CHAPTER 1 The Science of Macroeconomics Why learn macroeconomics? 1. The macroeconomy affects society’s well-being. percent of labor force c r i m e s p 1 0 , o u l a t n U.S. Unemployment and Property Crime Rates Unemployment (left scale) Property crimes (right scale)
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8 CHAPTER 1 Why learn macroeconomics?
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ch%201 - MACROECONOMICS N.GregoryMankiw CHAPTE R 1 The S c...

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