Introduction to Macroeconomics

<aside> 💡 Macroeconomics is concerned with the performance of the general economy as a whole

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It studies the behaviour of economic aggregates and averages, and how they are influenced by government policy.

For example:

• Total Output
• Total Investment
• Average Incomes
• Price Levels

A full understanding of macroeconomics requires understanding the nature of short-run fluctuations as well as the nature of long-run economic growth

Outcome and Income

<aside> 💡 One of the most important ideas in economics is that the production of goods and services generate incomes

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• Also known as “National Product”
• Measures the value of a country’s total production of goods and services

<aside> 💡 Trough: characterized by unemployed resources and a low level of output in relation to economy’s capacity to produce

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Potential Reasons:

• Business Profits are low, or even negative
• Confidence about economic prospects in the near future are low
  • Leads businesses to not want to risk making new investments
  • ex. expansions of their facilities

Characteristics of the Recovery Process:

• Run-down equipment is replaced
• Employment
  • Production can be increased