ECON 1000 Chapter Notes - Chapter 1: Critical Role, Market Clearing, Macroeconomics
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ECON 1000 Full Course Notes
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Macroeconomics the study of the economy, answers questions about the economies of nations. Plays a critical role in politics -> government policy affects the economy (gov"t supported when economy does well, opposite applies) Macroeconomists determine many variables (income, unemployment, etc ) to make theories. Real gdp - measures the total income (output) of the economy -> per person: income of average person. Inflation rate measures how quickly prices are rising -> % change in average level of prices. Unemployment rate fraction of the labour force that is unemployed. Recession period where real gdp falls (1930s) mildly and depression -> severe drop. Deflation periods of falling prices -> inflation more normal (mid-1970s severe) High unemployment (highest great depression 1930s) usually associated with inflation/deflation. Model made of symbols and equations that help explain economic variables -> illustrate relationship among variables. Dispense irrelevant details and focus on underlying connection. Have two kinds of variables: endogenous and exogenous.