Macroeconomics

Macroeconomics

1. Measuring National Economic Performance

   • Gross Domeestic Product (GDP)
     • GDP per capita
     • measuring methods
       • Expenditure method
       • Income method
       • output method
   • Gross National Product(GNP)
   • Gross National Income

2. Aggregate demand

   • AD=C+I+S+Xm
   • Determinants (shitts) of AD
   • Keynesian Spending Multiplier

3. Aggregare supply

   • equilibrium national output
     • short-run equlibrium-Keynesian, sticky wage model
       • perfectly elastic below full employment level
       • perfectly inelastic beyond FE level
     • long-run equilibrium- Neo-classical, flexible wage model
   • shifts (determinants) in AS
   • SRAS/ LRAS

4. Macro objectives

   • Unemployment
     • definition
     • consequences
     • types of unemployment and causes
       • cyclical
         • business cycle
           • expansion
           • peak
           • recession
           • depression
       • Natural Unemployment rate
         • seasonal and fractional
         • structional
   • low inflation (price stability)
     • deflation
       • consequences
       • deflationary spiral
     • inflation
       • types of inflation + causes
         • demand-pull (increase in AD)
         • supply-push (decrease in AS)
       • inflationary spiral
       • consequences of inflation
       • disinflation
     • Phillips curve
       • relationship between unemployment and inflation
       • short-run
       • long-run
   • economic growth
     • meaning
     • causes
     • calculation
     • consequences
   • income distribution equity
     • equality vs equity
     • Lorenz curve
     • Gini Coefficient

5. demand side policies

   • fiscal policy
     • contractionary
       • decrease spending + increase taxation
     • expansionary
       • increase spending + decrease taxation
         • Keynesian spending multiplier (K = 1/(1-MPC)
           • spending is more effective than taxation
     • automatic stabilizer
       • government spending
       • taxation
     • government
   • monetary policy
     • money supply (vertical); interest rate
     • central bank

6. supply side policy

   • market-based
     • labour market reforms
       • union power
       • minimum wage
       • unemployment benefits
     • policies to encourage competition
       • deregulation
       • anti-monopoly
       • privatization
       • trade liberalization (free trade)
     • incentive-related policies
       • income tax
       • business and capital gains tax
   • interventionist
     • investment in human capital
       • education/ training
       • health service
     • investment in new technology
     • investment in infrastructure
     • industrial policies
       • financial incentives
       • protection for infant industries