Introduction to Macroeconomics & Macro Objectives
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13 Terms
What does macroeconomics study?
The economy as a whole — output, employment, inflation, and growth.
What does GDP measure?
The total value of goods and services produced in an economy.
What is economic growth?
An increase in real GDP over time.
What is the target rate of inflation?
2%.
What is unemployment?
When people willing and able to work cannot find jobs.
Name the three types of unemployment.
Cyclical, structural, frictional.
What is the Balance of Payments?
A record of all transactions between a country and the rest of the world.
What is the goal of a stable financial system?
To ensure financial institutions operate efficiently and safely.
What are injections?
Investment (I), Government spending (G), Exports (X).
What are withdrawals?
Savings (S), Taxes (T), Imports (M)
What happens if J > W?
National income increases.
What happens if J < W?
National income decreases.
What is the formula for aggregate demand?
AD = C + I + G + (X – M).