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Is macroeconomics the same for all countries? What three main differences separate micro- and macroeconomics? First, microeconomics studies individual components, whereas macroeconomics studies the economy as a whole.
Second, controversy aside, government involvement in microeconomics is relatively small, and relegated to public goods, regulation, and welfare.
But, controversy notwithstanding, government involvement in macroeconomics is rather substantial, nearly total; it is only government that makes and enforces monetary and fiscal policy.
Third, whereas microeconomics has been around since the mid eighteenth century, macroeconomics began only as a reaction to the Great Depression of the s. Who introduced macroeconomics, and what was its major objective? John Maynard Keynes, an English economist, hence macroeconomics is also referred to as Keynesianism.
Keynes argued that by itself the market is unable to generate enough savings capital to sustain investment at full employment levels; and that this could be achieved only with the periodic sharp increase in government spending. Why is macroeconomics said to be a typical public good? Second, the effects of a stable economy are enjoyed by all, producers: What are economic indicators of macro-economic variables; and why is knowledge about them important?
Macroeconomic variables are indicators or main signposts signaling the current trends in the economy Like all experts, the government, in order to do a good job of macro-managing the economy, must study, analyze, and understand the major variables that determine the current behavior of the macro-economy.
So government must understand the forces of economic growth, why and when recession or inflation occur, and anticipate these trends, as well as what mixture of policy will be most suitable for curing whatever ills the economy.
Of the many economic indicators listed on page of your book, you will be tested on knowledge about these twelve: How is growth measured? It is measured over time relative to the performance of the economy over the exact same period in the immediate past, such as the economic calender year, that is, Oct.
Why is growth important? In which three ways can growth be defined? GNP stands for the Gross National Product, a measurement of the annual economic productivity of the property and labor of all but only citizens of a country regardless where this activity occurs in the world.
GDP stands for the Gross Domestic Product, a measurement of the annual productivity of the property and labor of all citizens and foreign residents within the geographic borders of a country including its foreign territories such as embassies and purchased military bases abroad.
Whether you measure the GDP by spending, by production, or by income, be sure to count final market value of goods and services only once. Be sure to exclude: Second, GDP exaggerates actual improvement in the standard of living. Take a look at figure on page of your book. Real income is nominal or money or unadjusted income adjusted for inflation.
Practice with Table Therefore, the real-GDP is no more accurate than as a comparison between two economic periods; Paul is taller than John, but shorter than James. GDP reflects only the dollar worth of the economy, not the economic well-being of citizens.
FORECASTING Forecasting intended to reduce the level of uncertainty about the future trend of the economy is necessary for the rational planning of production, and hence for the overall efficiency of the economy.
Short term economic forecast, up to 8 quarters ahead. Medium-term economic forecast, is between 2 to ten years Long-term forecast is any prediction more than ten years ahead; special cases call for prediction of 30 years ahead. Forecasting is made a little easier by the recurrent nature of the business cycle, enabling macro-economists to establish statistical regularities as formula for predicting the economy.
But statistics not withstanding, economic forecasting is not a precise science and predictions may often be off target. Yet forecasting still serves the useful purpose of giving us, within broad limits, a sense of where the economy may be headed, allowing consumers, producers and government macroeconomic policy planners to plan ahead with some level of rational certainty.
The Business Cycle No economy however strong ever follows a straight growth path; all economies fluctuate over time. Fluctuations in the economy GDP over time are referred to as business cycles.
The Great Depression forced neoclassical economists to accept for the first time that business cycles and the extent of fluctuations in the economy are both significant. For a number of theoretic and historical reasons, both classical as well as neoclassical economists had prior to the Great Depression, believed business cycles would be weak and insignificant for the overall production.Support New America — We are dedicated to renewing America by continuing the quest to realize our nation's highest ideals, honestly confronting the challenges caused by rapid technological and social change, and seizing the opportunities those changes create.
Transformation in economics refers to a long-term change in dominant economic activity in terms of prevailing relative engagement or employment of able individuals.
Human economic systems undergo a number of deviations and departures from the "normal" state, trend or development. The Economy of China is a socialist market economy it is the world's second largest economy by nominal GDP, and one of the world's largest economy by purchasing power parity.
Until , China was the world's fastest-growing major economy, with growth rates averaging 10% over 30 years. Due to historical and political facts of China's developing economy, China's public sector accounts for a. The Czech Republic and Economic Transition in Eastern Europe is the first in-depth, comparative analysis of the Czech Republic's economic transition after the fall of the Communist bloc.
Edited by Jan Svejnar,a principal architect of the Czech economic transformation and Economic Advisor to President Vaclav Havel, the book poses important questions about the Republic and its partners in.
Insights into the aforementioned terms ‘economic growth’ and ‘economic development’ are given as follows Economic Growth Economic Growth is an increase in a country's real level of national output which can be caused by an increase in the quality of resources by education etc, increase in the quantity of resources & improvements in technology.
The New York Fed provides a wide range of payment services for financial institutions and the U.S. government. The New York Fed offers the Central Banking Seminar and several specialized courses for central bankers and financial supervisors.