Introduction to macroeconomics
- Created by: lizziegill17
- Created on: 17-02-14 14:18
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- Introduction to macroeconomics
- Diference between Micro and macro
- Micro - The study of decisions made at the level of individual consumers, firms and markets
- Macro - the study of the economy as a whole i.e. how all the markets come together and affect economic growth, Inflation, u/e, and the balance of payments
- The circular flow of income
- Open economy = trade
- Closed economy = no trade
- M = imports T = tax X= exports S = saving I = investment G = government spending
- Diagram of expenditure, goods and services, labour (FOPs) and Income/wages
- SPICED - Strong Pound Imports Cheaper Exports Dearer
- Injections and Withdrawals
- If injections > withdrawals then the economy will grow but if withdrawals > injections the economy will contract and potentially be heading for a recession
- An economy is in equilibrium if I = W (rates) aka equilibrium income or national income equilibrium
- Economic indicators
- Quality of Life indicators
- Pollution
- Literacy rates
- They are a measure of economic performance and welfare. Important
- A measure for acheiving government objectives
- International comparison
- Trends and forecasting
- Non-economic indicators give a better picture of the standard of living
- Quality of Life indicators
- Diference between Micro and macro
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