UNIT 2

Measures of Macroeconomic Performance a) Economic growth b) Inflation c) Employment and unemployment d) Balance of payments e) Measures of development - Human Development Index (HDI) f) Other measures of development The Circular Flow of Income a) The circular flow of income Aggregate Demand (AD) a) Aggregate demand (AD) Aggregate Supply (AS) a) Aggregate supply (AS) The Interaction of AD and AS to Determine Equilibrium a) Equilibrium level of real output b) The multiplier Economic Growth a) Economic growth Macroeconomic Objectives and Policies a) Macroeconomic objectives b) Conflicts between objectives c) Macroeconomic policy instruments