Chap 1 - Chap 1 1) Primary defining characteristics of...

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Chap 1 1) Primary defining characteristics of macroeconomics: Aggregate behaviour of consumer and firms, the behaviour of governments, the overall level of economic activity in individual countries, the economic interactions among nations, and the effects of fiscal and monetary policy. 2) Macroeconomics studies the economic behavior of the whole economy while microeconomics studies the economic behavior of individual firms or consumers. Macroeconomics uses microeconomic principles. Their theories are consistent with each other. 5) What causes sustained growth? Could economic growth continue indefinitely or is there some limit to growth? Is there anything that governments can or should do to alter the rate of economic growth? What causes business cycles? Could the dramatic decreases and increases in economic growth that occurred during the great depression and World War II be repeated? Should governments act to smooth business cycles? 6) The slope of the graph of the natural logarithm of a time series y t is a good approximation to the growth rate y t when the growth rate is small. Slope dlny/dx = lny t -lny t-1 /1 = g yt 7) The trend component is the growth component of real GDP per capita while the business cycle component is the difference between the trend component and the actual gdp. Deviations from the trend line represent business cycles.
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Chap 1 - Chap 1 1) Primary defining characteristics of...

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