ECN 204 Lecture 1: Introduction to Macroeconomics
14 Feb 2018
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Key themes: equilibrium: what is equilibrium, quantities demanded = quantity supplied, characteristics, markets must function without impediments, wages and prices must be flexible. Key themes: marginal: marginal = additional, what does an additional step do for you, marginal benefits vs marginal costs. Indicators: real gdp, measures the value of final goods and services, final goods: a good that is produced as a result of manufacturing and is then consumed. Increase in the overall level of prices: reduces purchasing power of savings, decreases standard of living. What else do macroeconomists do: build models, helps us to understand how policy makers attempt to, maximize economic growth (real gdp, minimize unemployment and inflation. In order to raise living standards, an economy must devote some of its current output towards increasing future output: savings: the accumulation of funds that results when people in an economy spend less than their income. Investment: spending for the production and accumulation of capital and additions to inventories.
