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Introduction to Macroeconomics - Coggle Diagram
Introduction to Macroeconomics
Output Growth
Recession
the whole output declines
Depression
a prolonged and deep recession
Aggregate Output
total quantity of goods & services produced in the economy in a given period
Expansion / Boom
business cycle from trough to peak (output & employment grow)
Business Cycle
short-term ups & downs in the economy
Contraction / Recession / Slump
business cycle from peak to trough (output and employment fall)
Components of the Macroeconomy
Public Sector
Government
Foreign Sector
The rest of the world
Private Sector
Households
Firms
The Three Market Arenas
Labour Market
Firms & The Government
demand labour
The rest of the world
supply & demand labour
Households
supply labour
Money Market
Firms
borrow funds to build new facilities
The Government
borrows funds by issuing bonds
Households
supply funds to the money market (expect to earn income)
The rest of the world
borrows from and lends money to the market
Goods-and-Services Market
Firms
purchase goods & services from each other
supply to the goods-and-services market
The rest of the world
buys from and sells to the goods-and-services market
Households & Government
purchase goods & services from firms
The Role of Government in the Macroeconomy
Fiscal Policy
concerning taxes & spendings
Monetary Policy
control short-term interest rates