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Introduction to Macroeconomics
Fatma Taskin Fall 2015
The study of whole economy. Not individual markets, Not individual firm or consumer, Not individual price level;
Macroeconomics
The study of whole economy. Not individual markets, Not individual firm or consumer, Not individual price level;
Which ‘whole economy’?
Macroeconomics
Principles that govern the workings of an economy,
ex. US economy, Turkish economy or Chinese economy,
Subject of Macroeconomics
Principles that govern the workings of an economy,
ex. US economy, Turkish economy or Chinese economy,
Sovereign Nations
Subject of Macroeconomics
Among nations (internationally) commodities, services are being sold and bought.
Financial assets are being bought and sold, Capital goods (machinery) etc are exchanged.
What is not allowed to be exchanged? Or move internationally?
Labor...
Why sovereign nations?
has their own currency, has their own government, who does
spending and collect taxes,
Each sovereign nation
US? Luxembourg? Turkey? China?
Which macroeconomy is the best?
Total Output ProducedEx. 3.7 billion tons of cement,
19 million tons of wheat, 733 thousand cars...
How do we measure economic performance?
Total Output ProducedEx. Ex. 3.7 billion tons of cement,
19 million tons of wheat, 733 thousand cars...
Total value of output,Value = price x quantity
How do we measure economic performance?
Total Output ProducedEx. 3.7 billion tons, 19 million tons or 733 thousand cars...
Total value of output,Value = price x quantity
Sum of all final goods and services production in a year in one country
How do we measure economic performance?
Total Output ProducedEx. 3.7 billion tons of cement, 19 million tons of wheat or 733 thousand cars...
Total value of output,= price x quantity=
Sum of all final goods and services production in a year in one country
GROSS DOMESTIC PRODUCT (GDP)
How do we measure economic performance?
GDP 2014 trillion US dollar
World 77.3
EU 18.5
US 17.4
China 10.3
.
Canada 1.7
Turkey 0.8
Sweden 0.5
Which country has the largest GDP?
GDP 2014 trillion US dollar
Population GDP per personUS dollar
World 77.3
EU 18.5 508,300,000 36,268
US 17.4 321,786,000 54,597
China 10.3 1,371,980,000 7,589
.
Canada 1.7 35,749,600 50,398
Turkey 0.8 77,695,904 10,482
Sweden 0.5 9,793,172 58,491
Which country has the largest GDP?
GDP per capita = GDP per person GDP per capita = GDP/population
Ex: if GDP grows at 3 % per year and population grows at 3 % per year what happens to the ratio?
How can you increase a country’s GDP per person?
Two facts of macroeconomics
GDP increases almost every year... GROWTH
GDP increase fluctuates... BUSINESS CYCLES
Course web page: ~taskin/teaching/econ 102
You need to have a correct email:
Lectures: Mondays and Thursdays in V02 Recitation hours: 2 hours every week,
Course plan
1 midterm, 1 final exam, 6 homeworks, discussed in recitation hours, 6 quizzes Participation;
Requirements
Miss more than 2 quizzes, If you have less than 30 % of the possible
points before the final exam.
FZ Conditions
Strongly recommended; Participation is important as much as
attendance.
Attendance
Strongly recommended; Participation is important as much as
attendance.
You may come in late, BUT do not leave while lecture is in session. Try to be mentally present, not just
physically.
Attendance
