CAS EC 102 Lecture Notes - Lecture 1: Business Cycle, Fiscal Policy, Aggregate Demand

• School: Boston University
• Department: Economics
• Course: CAS EC 102
• Professor: Bruce Watson

Document Summary

Characteristics of macro: time frame, expectations matter, time frame: long run vs short run, expectations matter, greater complexity-more complex math, highly empirical-emphasis on data, policy driven. Short run: is all about business cycle fluctuations (ups and downs in economy/recessions and expansions in economy) -short run has a lot to do with aggregate demand (everybody s demand including consumers, firms, govs, and consumers overseas for. Thus the government partakes in a lot of demand management (gov thinks of ways and adds policies to boost aggregate demand, or come up with ways to dampen it down) (gov trying to affect fluctuations in economy) Monetary policy (policies designed to affect interest rates) Fiscal policy (policies on taxes and government spending) Economic decisions are based on our expectations and current situations: greater complexity-more complex math. As economics gets more in depth, calculus and complex math will be involved: highly empirical-emphasis on data. Numbers that describe the economy: policy driven.