The world is complex. The economy of a country affects every individual in some or the other way. Most of us depend on the nation’s economy to get jobs or any other business opportunity to make money and survive in today’s modern world. The study of country’s economic phenomena such as inflation, unemployment, etc. is called Macroeconomics- the subject on which ECO 105 class is all about. Below are the basic topics covered in this class-
This class teaches you how macroeconomic output or income of a country is measured which is usually called GDP (Gross Domestic Product). It is believed that advances in technology, human capital, education and all other factors have led to increased economic output over time. However, this class teaches you how output does not always increase consistently. Instead business cycles can cause some drops in output causing recessions and how it affects country’s overall economy.
Aggregate demand-aggregate supply
The AD-AS model is a most common way used to explain the concept of the macroeconomy. The AS-AD diagram models a variety of phenomena such as inflation, deflation, etc. This helps students understand how changes in the non-price level factors cause changes in aggregate demand and shifts of the entire aggregate demand (AD) curve. Students will also learn what is an inflationary and recessionary gap and what are its effects on equilibrium demand and supply. The AS-AD diagram is also widely used as a pedagogical tool to show the effects of various policies. like monetary policy and fiscal policy.
Inflation and deflation
Inflation and deflation refer to a general price increase or decrease across the entire economy of the nation. This class teaches students the factors responsible for these changes and what can be done to stabilize prices. This leads the class to learn about macroeconomic policies such as monetary and fiscal policy. The macroeconomic policy focuses on limiting the effects of the business cycle to achieve the economic goals of price stability, full employment, and growth.
Next and one of the most important topics covered in this class is unemployment. This class illustrates various causes of unemployment and how a government tries to reduce unemployment as much as possible. It also teaches you how a country’s unemployment rate is measured and at last it illustrates various types of unemployment such as frictional unemployment, structural unemployment, cyclical unemployment, etc.
Thus, in conclusion, macroeconomics class helps us understand what brings changes in our economy. A growing economy provides possibilities for better lives, while a contracting economy can be ruinous for everyone. Macroeconomics provides the review for suitable policy making so that we can strengthen and sustain the best economy achievable.