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Unformatted text preview: og (GU) Chapter 1: Introduction Spring 2014 19 / 24 Markets and Institutions Circular Flow (ﬁgure 1.9) Figure : Circular Flow
Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 20 / 24 Markets and Institutions Key Players Households
Rest of the world Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 21 / 24 Markets and Institutions Policy Our government actively pursues policies to maximize economic well
being. In this class our focus will be on macroeconomic policies used
to minimize ﬂuctuations in the business cycle.
Fiscal policy: Conducted by the federal government through spending
and tax programs.
Monetary policy: Conducted by the Federal Reserve through changing
interest rates to promote investment. Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 22 / 24 Brief History Great Depression The Great Depression is referred to as the holy grail of
Adam Smith’s invisible hand, markets are self correcting.
John Maynard Keynes, markets are slow to adjust and may require
government intervention. Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 23 / 24 Key Issues in Macroeconomics Key questions today and going forward Jobs, where are they?
What are the macroeconomic eﬀects of income inequality?
Inﬂation or deﬂation?
Government deﬁcits or more stimulus?
Spending or saving?
China, panda or dragon? Ryan W. Herzog (GU) Chapter 1: Introduction Spring 2014 24 / 24...
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This document was uploaded on 03/18/2014 for the course ECON 202 at Gonzaga.
- Spring '09