Econ 2301 Study Guide

There are four main macroeconomic objectives of the government it wishes to achieve in order to maximise the welfare of the society, they are: low and stable inflation, a favourable current account position on the balance of payments, low unemployment and sustained economic growth.

This course provides students with the basic theories, concepts, terminology, and uses of macroeconomics. Students learn practical applications for macroeconomics in their personal and professional lives through assimilation of fundamental concepts and analysis of actual

Prompt: Analyse how aggregate demand, aggregate supply, saving, investing, business cycles, and GDP effect the nation's economy (including types of unemployment, poverty, economic growth, and inflation).

Economic policies are aimed at finding satisfactory solutions to various problems that emerge from time to time in any economic system. In most instances, the so called problems present themselves in the form of inflation, unsatisfactory or poor economic growth and unemployment. It is not always simple and straight forward to solve such dilemmas, especially because their impact, implications and importance changes from time to time. (Roux, 2008).

This paper will address the how the monetary policy has an impact on the factors of macroeconomics, such as gross domestic product (GDP), interest rates, inflation, and unemployment. According to the Federal Reserve, the Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy 's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

With macroeconomics you can get a basic understating of concepts that deal with unemployment, inflation, business cycles, taxation, financial policies, and economic growth. Producers and consumers are the two most important in achieving a healthy and stable economy under free market capitalism. Consumers consume which in turn creates demand of a product or service while producers supply those products and services. In a supply and demand economy, there are many theories that try to further understand business transactions. With Law of Demand and Law of Supply we can determine the behavior of both the consumers and the producers. Law of demand determines that price and demand have an inverse affect to each other. As prices of a product and service increase, demand of a product and service will decrease and vice versa while

Economy holds great importance in our lives when it comes analyzing how money functions overall, what employment really means, and what kind of fluctuations affect the world we live in. It encompasses a great wealth of knowledge that allows us to understand and make sense of many occurrences and events in the world. Before delving into the details, this paper showcases the history behind how macroeconomics came into being and the main aspects of it.

To begin with, one must have a basic knowledge of the Business Cycle in order to understand key subjects such as Aggregate Demand, Aggregate Supply, and Unemployment. Over time, the economy varies in its stages of movement; we refer to these six stages as the Business Cycle. The Expansion stage is characterized by an increase in total spending, CPI, and GDP, as well as a decrease in the rate of unemployment. CPI stands for Consumer Price Index, which is the “measurement of the price level based upon a collection of goods purchased by a “typical family” in a target year expressed as a

The history of macroeconomic thought and policy was developed through different phases mainly marked by the depressions, recessions and expansion of the 1930s, 1960s, 1970s, 1980s, 1990s, and 2000s. Various macroeconomic theories were developed during these periods. Among them, Keynesian and classical economics addressed economic problems such as unemployment issue with similarities but also differences.

Throughout the semester many concepts of macroeconomics and economics as a whole have been discussed thoroughly. Macroeconomics is defined as the study of the economy as a whole. The study of macroeconomics consists of many economic indicators. These economic indicators allow analysis of economic performance, predictions of future performance, and will indicate the overall health of the nation. Economists want to be able to forecast the direction the economy will take in the near future and they rely on different economic indicators. They have never agreed on a single economic indicator to predict the future. Some indicators are better than others, but none is consistently accurate; all give a false signal on occasion. The six economic indicators that will be focused on are Gross Domestic Product, Unemployment, Consumer Price Index, Retail Sales, Consumer Confidence, and Durable Goods. The economic indicators help see where the economy is in terms of the business cycle, which shows the rising and falling of economic conditions over time.

My academic aptitudes in Economics have always been testified throughout the undergraduate study.Through these years’ study in Economics at Boston University, I familiarized myself with different economic schools and their contradictory theories of business cycles and macro-control.Through case study in legal economics, I deepened understanding how to fulfill public benefits via economic rules and regulations. Through courses like Calculus and Econometrics, I enhanced the capacity and obtained

Macroeconomics has become an overriding thing. The need to promote a healthy economy has been a critical goal for most governments and economists. However this has not been tenable in most cases. The economy can fluctuate but should not go out of control. This means that it has to stay within the expected realms of growth path so that it is capable of avoiding long-drawn recessions. This can occur based on internal mechanism or through help from policy that provide protection from inflation and recession. The economy should be able to respond to such polices without any major structural constraints. In this case, macroeconomics helps in understanding the underlying issues that can help in the realization of such economies. A healthy economy has to be steady and stable over the long-term. Based on this information, this paper explores the underlying issues in macroeconomics, especially with regard to components.

Macroeconomics as a science deals with the performance and behavior of the economy as a whole. It focuses its attention on the economic growth, business cycle, interest rates, inflation and the behavior of major economic aggregates such as the government, household , and the business sectors.

In modern society, it is vital to understand the principles and policies that make up our economy. Although many are unaware, the economic decisions made by the Feds, congress, and the president affect how individuals live, invest, and purchase on a day to day basis. As economic policies fluctuate and the value of the dollar increases or decreases, the demand, supply, and prices of goods fluctuate and determine individual 's standards of living and how they consume. Whichever economic policies are currently in effect determines the affordability of certain products, thus determining how individuals allocate their funds. The allocation of individuals funds determines how much profit companies and businesses make, which can either stimulate or slow down the overall economy. The breakdown of the primary economic policies, including demand-side, supply-side, and monetary policy, are the prime components that distinguishes how we as consumers are affected by the economy.

ECON112 Macroeconomics Problem Set 1 *Solution* By Yao Amber Li Fall 2010 (Instructor: Li, Yao; TA: Fok Pik Lin, Astor)