Wednesday, December 20, 2006

Principles of Macroeconomics: Introduction I

Macroeconomics: The study of "ordinary business of life" in aggregate. In other words, the behavior of the economy is analyzed as a whole.

Key Variables: Total Output (GDP), Aggregate Price Level, Employment and Unemployment, Interest Rates, Wage Rates, Foreign Exchange Rates.

Subject Matter: Factors that affect these variables; static level and changes over time.

Note: Macroeconomics focus on policy-oriented part of economics, especially how government policies affect economy (as a whole, of course).

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