Introduction - Introduction to Macroeconomics I....

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Introduction to Macroeconomics I. Macroeconomics: What is it? Definition : Macroeconomics studies the economy as a whole – general equilibrium . It studies the outcomes of the interactions of all microeconomic agents. General equilibrium vs. partial equilibrium Econ 1:partial equi in one market you use supply and demand General equilibrium is all markets in equilibrium – we look at their interactions General equilibrium versus partial equilibrium General equilibrium: simultaneous equilibrium in all markets. Partial equilibrium: equilibrium in one market, such as software – supply and demand
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Key Macroeconomic Agents Households work, consume output and save Firms produce output, hire workers, invest in capital Government - Monetary authority - Federal Reserve, European Central Bank) control money supply, affect interest rates - Fiscal authority Create institutions, tax and spend Households – work, consume, and save Firms – produce output, hire workers, and invest in captal Government – a)monetary authority – controls money supply, interest rates US: Fed (Federal Reserve) Europe: ECB European Central Bank b)fiscal authority (gov’t) – tax and spend, create institutions
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The Major Macroeconomic Issues I. Economic Growth and Living Standards A. Definition : The Standard of Living is the degree to which people have access to goods & services Usually, the more we produce the higher our living standards
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This note was uploaded on 04/07/2008 for the course GENERAL ED MMW 1,2; E taught by Professor Vandehey during the Spring '08 term at UCSD.

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Introduction - Introduction to Macroeconomics I....

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