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Chapter 1: Macroeconomics - Coggle Diagram
Chapter 1: Macroeconomics
What is Macro?
Study of the structure and performance of national economies and policies that being used by government to affect economics performance
Branches of economics that studies the behavior and performance of economy as a whole
Issues being addresses by Macro?
1- Can government policies being used to improve economic performance?
What being determines a nation long run economic growth?
What cause a nation economic activity to fluctuate?
What cause unemployment?
What cause of the price rise?
Government Macro Objective?
Favorable balance of trade
Economic growth
Low level of unemployment
Stable prices
Government Policies
1) Fiscal policy
Government spending
Taxation and Benefits
2) Monetary policy
Interest rate
Control of Money Supply
Examples of policies change?
1)
Cut income tax
rates leaving people with more money to spend (fiscal policy affecting aggregate demend)
2)
Increase spending
in areas such health and defence to generate more demand ( fiscal policy affecting aggregate demend)
3)
Make it cheaper for people to borrow money
by lowering the interest rates (monetary policy affecting aggregate demand)
4)
Make it cheaper and easier for the firms to borrow money
to invest in new equipment (monetary policy affecting aggregate supply)
5)
Reduce unemployment benefits
to encourage more people to work (fiscal policy affecting aggregate supply)