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AQS2241 Econ for QS2 Prof. Dr. Mohd A Mohit1Lecture-1; Economics for QS2Assalamu-alaikum Wrht. Wbkth.PRESENTATION OUTLINEMacro-Economics Key ME Variables.Key ME issues.ME & Built EnvironmentAQS2241 Econ for QS2Prof. Dr. Mohd A Mohit2Lecture-1; Economics for QS2Several braches in Economics Microeconomics & MacroeconomicsWhat is Macro-Economics (ME)? ME - concerned with economy as a whole large-scale analysis. Study behaviour of aggregates rather than parts. Aggregates total output, income, & growth rates; unemployment, price levels & money supply. If you are unemployed, a microeconomic problem, If 10 ml people are unemployed, it is a ME problem. Price of bricks rises, it is a microecon issue, but if the average price of construction material rises, it is a ME problem. ME - concerned not price of brick, but with prices in general; not with output of cars, but level of total output; not individual firm or industry, but whole economic system.AQS2241 Econ for QS2Prof. Dr. Mohd A Mohit3Lecture-1; Economics for QS2Differences between Micro & Macro-EconomicsMicroeconomicsMacroeconomicsStudies individual incomeStudies National incomeAnalyzes demand / supply of labourAnalyzes national employmentDeals with H/Hs or firms decisionDeals with aggregate decisionStudies individual pricesStudies overall price levelAnalyzes demand / supply of goodsAnalyzes aggregate demand / supplyKey ME Variables.Domestic variables - total output, employment & unemployment of a nation, & its money growth & inflation rates.International variables - trade balance & exchange rates of a nation. Put together all the above variables business cycle, recession, stabilization policy, stagflation.AQS2241 Econ for QS2Prof. Dr. Mohd A Mohit4Lecture-1; Economics for QS2Macroeconomic Goals. (Four)1. Full employment2. Price stability3. Economic growth4. Equitable distribution of incomeGovernment Policies1. Fiscal policies. (related to taxes & expenditures)2. Monetary policies. (to control supply of money)3. Growth policies. (stimulating aggregate supply; also known as supply side policies)AQS2241 Econ for QS2Prof. Dr. Mohd A Mohit5Lecture-1; Economics for QS2Key Issues in ME.Determining factors that influence a nations long-term growth in output & employment.Identifying the reasons that output & employment growth fluctuate in the short-run.Determining what influence the quantity of money has on a nations output, employment & prices.Identifying the appropriate goals of ME policies & determining how they should be implemented.ME seeks to understand how factors such as exchange rates & international trade affect a countrys economic performance.Components of ME.Circular Flow Diagram (transfer payments)& Three Markets Goods & Services market, Labour Market, Money market. International TradeAQS2241 Econ for QS2Prof. Dr. Mohd A Mohit6Lecture-1; Economics for QS2Why ME is a controversial Subject?Two features of ME in particular engender conflicting views:Macroeconomists may disagree about how much aggregation is optimal.Macroeconomists observe & analyze artificially constructed data on economic activity, which they cannot manipulate via controlled experiments.These features of ME naturally produce different interpretations & foster controversies.Relation of macro-economics with built environment.Components of BE building & construction, roads & bridges, physical dev. all their performances depend on the national economy.Table-1.docPrinciples of Islamic macroeconomics.ME variables & their performance in the light of Islamic principles. Riba vs. Islamic approaches in banking. Trade & finance. Zakat distribution system.AQS2241 Econ for QS2Prof. Dr. Mohd A Mohit7Lecture-1; Economics for QS2Components of ME. 1. Households; 2. Firms; 3. Govt. 4. Rest of the World.

AQS2241 Econ for QS2Prof. Dr. Mohd A Mohit8Lecture-1; Economics for QS2Aggregate Demand (AD)& Aggregate Supply (AS)AD refers to total quantity of output demanded at alternative price levels during a given period of time, ceteris paribus.AS - refers to total quantity of output demanded at alternative price levels during a given period of time, ceteris paribus.

AQS2241 Econ for QS2Prof. Dr. Mohd A Mohit9Lecture-1; Economics for QS2TUTORIAL-1: What these numbers represent in the flow chart?

AQS2241 Econ for QS2Prof. Dr. Mohd A Mohit10Thank You&Wassalam