PRESENTATION ON THE INTRODUCTION TO MACROECONOMICS
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Group A presented on the introduction to macroeconomics. They defined economics and macroeconomics, explaining that macroeconomics studies overall economies and economy-wide phenomena. They discussed how John Maynard Keynes and his book The General Theory revolutionized macroeconomics in response to the Great Depression. Finally, they outlined some key issues addressed by macroeconomics like employment, inflation, economic growth, and exchange rates.
PRESENTATION ON THE INTRODUCTION TO MACROECONOMICS
- 1. PRESENTATION ON THE INTRODUCTION TO MACROECONOMICS BY GROUP (A) This Photo by Unknown author is licensed under CC BY-SA-NC.
- 2. • ECONOMICS: Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices on allocating resources to satisfy their wants and needs, trying to determine how these groups should organize and coordinate efforts to achieve maximum output. • MACROECONOMICS: Macroeconomics is a branch of economics that studies how an overall economy—the market systems that operate on a large scale—behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.
- 3. THE ROOTS OF MACROECONOMICS • MACROECONOMICS: Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment. Macroeconomics, as it is in its modern form, is often defined as starting with John Maynard Keynes and the publication of his book • The General Theory of Employment, Interest and Money in 1936.Keynes offered an explanation for the fallout from the Great Depression, when goods remained unsold and workers unemployed. • JOHN MAYNARD KEYNES was a British economist, whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. • BORN: 6 June 1883
- 4. THE GREAT DEPRESSION • THE GREAT DEPRESSION: The Great Depression was the greatest and longest economic recession in modern world history. It began with the U.S. stock market crash of 1929 and did not end until 1946 after World War II. Economists and historians often cite the Great Depression as the most catastrophic economic event of the 20th century. During this event 1. STOCK MARKETS CRASHED 2. 9000 BANKS FILED FOR BANKRUPTEY 3. PEOPLE CUT DOWN SPENDING AND MUCH MORE
- 5. MICROECONOMICS VS MACROECONOMICS • MICROECONOMICS: Microeconomics is the social science that studies the implications of human action. How individuals make more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another. Generally speaking, microeconomics is considered a more complete, advanced, and settled science than macroeconomics. • MACROECONOMICS: Macroeconomics is a branch of economics that studies how an overall economy—the market systems that operate on a large scale—behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.
- 6. ISSUES ADDRESSED BY MACROECONOMICS 1. Employment and Unemployment: Unemployment refers to involuntary idleness of resources including manpower. If this problem exists, society’s actual output (or GNP) will be less than its potential output. 2. Inflation: It refers to a situation of constantly rising prices of commodities and factors of production. The opposite situation is known as deflation. During inflation some people gain and most people lose 3. The Trade Cycle: It refers to periodic fluctuations in the levels of economic or business activities, i.e., the tendency for output (GNP) and employment to fluctuate over time in a recurring sequence of ups and downs. 4. Stagflation: Most modern mixed economics suffer from the disease of stagflation which implies the co-existence of inflation and unemployment in a stagnant economy. Every country in the world is now struggling hard to fight the disease of stagflation. 5. Economic Growth: In spite of short-term fluctuations of output that are associated with the trade cycle, the long-term trend of total output has been upward in most industrially advanced country. The trend in the nation’s total output over the long period is known as economic growth. 6. The Exchange Rate and the Balance of Payments: The balance of payments is a systematic record of all economic transactions between the mem- bers of the home country and the rest of the world in an accounting year. These transactions are largely, if not entirely, influenced by the exchange rate. It is the rate at which a country’s economy is exchanged for another currency (or gold).
- 7. CIRCULAR FLOW OF INCOME IN AN ECONOMY • THE EXTERNAL TRADE SECTOR OF THE ECONOMY • THE DOMESTIC CIRCULAR FLOW OF INCOME: IT IS MADE UP OF HOUSEHOLD, GOVERNMENT AND FIRMS.