MGMT 4B Lecture Notes - Lecture 1: Consumer Choice, Monetary Policy, Keynesian Economics
Document Summary
Defensive: cut production, trim inventories (great time to start a large-scale capital expansion program. Offensive: increase capital expenditures, acquisitions at bargain prices (acquisitions cheap) Problems: unemployment, slow growth, trade imbalances, budget deficits, inflation, income inequality, falling productivity, lack of innovation. Policy tools: tax policy, fiscal policy, monetary policy, regulatory policy, trade and exchange rate policies. Recessionary signs: raise interest rates, rise unemployment rate, fall in consumer confidence. Microeconomics: 1, demand supply equilibrium (consumer theory, producer theory), 2 market stru(cid:272)ture, (cid:894)(cid:272)o(cid:373)petitio(cid:374), mo(cid:374)opol(cid:455) . (cid:895) (cid:272)o(cid:374)du(cid:272)t, a(cid:374)d perfor(cid:373)a(cid:374)(cid:272)e, 3 (cid:373)arket failures a(cid:374)d go(cid:448)t intervention (externalities, imperfect information); govt unnecessary. Macroeconomics: pro(cid:271)le(cid:373)s(cid:894) i(cid:374)flatio(cid:374), u(cid:374)e(cid:373)plo(cid:455)(cid:373)e(cid:374)t, (cid:895) solutio(cid:374)s (cid:894)fis(cid:272)al poli(cid:272)(cid:455), ta(cid:454) poli(cid:272)(cid:455), (cid:895) busi(cid:374)ess cycle management( business executives, investors and money managers) Inflation: upward movement prices from one year to the next, measured by percentage change in price indices; cpi consumer price index(a market basket), ppi producer price index(raw materials), gdp deflator. Cpi market basket: clothing, shelter, fuel, transportation, medical care, college tuition, food.
