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Introductory Macroeconomics
Lecturer: Mr. Sydney Armstrong
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Economics is the study of how society uses scarce
productive resources to produce valuable commodities
and distribute them among different people.
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Microeconomics
 Macroeconomics
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Microeconomics is the study of the economic actions of
individual and well-defined groups of individual.
In essence it is the study of a specific sector from an entire
economy
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Macroeconomics analyses the behaviour of the entire economy and
major spending sector: Household Consumption, Business
Investment, Government Expenditure and Net Export (export less
import) the study of the economy as a whole.
The field focuses primarily on the level of output for the entire
economy, the general level of prices, the rate of unemployment and
the economy’s balance of payments.
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Macroeconomics did not exist in its modern form until 1936
2. John Maynard Keynes is considered to be the founder
3. Great Depression of the 1930s
4. High levels of unemployment (England & USA)
1.
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You had the classical economists (Like Adam Smith) who
believed that all economy will gravitate to some equilibrium
position and that any deviation from that position, in the long
run the economy will self correct and therefore there no need
for government intervention.
As a result an economy in recession, left alone, will correct it self
and things will get bright again without government
involvement.
The Great Depression proved this to be incorrect!!!!!
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1.
Economic Growth (change in the level of output/ GDP)whereby GDP is the value of all final goods and services
produced in a country.
2. Unemployment- The state of not having a job but actively
searching for one.
3. Inflation- The general rise in the price level.
4. The Balance of Payments- A summary report of all the
transaction between a country and the rest of the world
5. Exchange Rates- The value of one currency in terms of
another
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1.
2.
3.
4.
5.
6.
Real Gross Domestic Product (Real GDP)
The unemployment rate
The inflation rate
The interest rate
The exchange rate
The level of the stock market
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1.
2.
3.
4.
5.
High but controllable levels of economic growth
Stable inflation rate
Low rate of unemployment
Stable exchange rate
Balanced balance of payment
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Economic growth has been defined generally as an increase in
real GDP or real GDP per capita for a given time period.
While both of the measures are important in giving an idea of
an economy’s economic soundness they serve different
purposes. The level of real GDP of an economy represents the
economic, political and in some cases the military stature of a
country, the United States which happens to be the world’s
largest economy is a good example.
On the other hand real GDP per capita – real GDP divided by
the total population – serves as an indicator of a country’s
standard of living.
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Natural Resources
2. Capital Accumulation
3. Rate of Saving
4. Technological Progress
1.
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1.
2.
3.
4.
5.
Promote Savings
Promote Mobility
Promote Education and Training
Promote Research & Development
Promote the Supply side
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