1.Introduction to Macroeconomics

Macroeconomics

The study of the structure and performance of national economies and the policies governments use to affect economic performance.

Gross Domestic Product (GDP)

A measure of the value of final goods and services produced within a country's borders during a specific period.

Business Cycle

Short-run fluctuations in economic output, characterized by periods of recession and expansion.

Unemployment

The state of being without a job while actively seeking work.

Inflation

A general increase in prices and fall in the purchasing value of money.

Trade Surplus

A situation where exports exceed imports.

Trade Deficit

A situation where imports exceed exports.

Fiscal Policy

Government policies concerning taxation and spending to influence the economy.

Monetary Policy

Government policies that influence the growth of the money supply.

Modern Economic Growth

Rapid and sustained economic growth that differs from historical growth patterns.

Keynesian Approach

An economic theory that emphasizes the role of government intervention in stabilizing the economy.

Monetarist

An economic school of thought that emphasizes the role of governments in controlling the amount of money in circulation.

New Classical School

An economic theory that assumes markets clear continuously and any unemployment is voluntary.

New Keynesian

An economic approach that incorporates microeconomic foundations and market imperfections to understand economic phenomena.

Dynamic Stochastic General Equilibrium (DSGE) Models

Models that analyze macroeconomics through the interactions of representative agents in various markets, incorporating random shocks and market frictions.

Recession

A period of economic decline characterized by falling GDP and increased unemployment.

Hyperinflation

An extreme form of inflation, where prices increase rapidly, exceeding 50% per month.

Adaptive Expectation

The theory that people form expectations based on past experiences.

Rational Expectation

The theory that economic agents use all available information to predict future economic conditions.

Real Business Cycle

An economic theory that suggests business cycles are caused by real shocks to the economy rather than monetary factors.

Laissez-faire

An economic philosophy of free-market capitalism that opposes government intervention.