mankiw_7e_chap01

mankiw_7e_chap01 - Where You Are Economics 305...

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Where You Are! Economics 305 Macroeconomic Theory T and Th from 8:00am to 9:15am Text: Gregory Mankiw: Macroeconomics , Worth, 7 th edition. A used copy of the 6th edition good. Course Webpage http://www.terpconnect.umd.edu/~jneri/Econ305 NOTE: upper-case E Who am I ? Dr. John Neri Ph D - a while ago in monetary economics Energy consulting since 1973 Office Hours: T and Th from 11:00am to 12 noon or by appointment. Office: Morrill Hall, Room 1102B
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Epilogue Let’s start at the end of the book. Epilogue – Four Most Important lessons of Macroeconomics: Lesson 1 In the long-run, capacity to produce goods and services (productive capacity) determines the standard of living (GDP/person) Chapters 3,7 and 8. GDP in the long-run depends on factors of production (amount of Labor (L) and capital (K)) and technology used to turn K and L into output. Public policy can increase GDP in the Long-run only by improving productive capacity of the economy Increase national saving leads to larger capital stock. Increase efficiency of labor (education and increase technological progress) Epilogue – Four Most Important lessons of Macroeconomics: Lesson 2 In the short-run, aggregate demand influences the amount of goods and services that a country produces Chapter 10,11 and 13 Monetary policy, fiscal policy Shocks to the system
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Epilogue – Four Most Important lessons of Macroeconomics: Lesson 3 In the long-run, the rate of money growth determines the rate of inflation, but it does not affect the rate of unemployment Chapter 4 High inflation raises the nominal interest rate (the real interest rate is not affected) High inflation leads to a depreciation of currency in the foreign exchange market In the long run there is no trade-off between inflation and unemployment Epilogue – Four Most Important lessons of Macroeconomics: Lesson 4 There is a trade-off between inflation and unemployment in the short-run Chapter 13, short-run Phillips curve Expand Aggregate Demand => U
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mankiw_7e_chap01 - Where You Are Economics 305...

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