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Macro Economic Goals
2.) Goals
Macroeconomic Goals
1.) Review Intro
Microeconomics
Focuses on how decisions are made by individuals and firms and the consequences of those decisions.
Example: How much it would cost for a university or college to offer a new course ─ the cost of the instructor’s salary, the classroom facilities, the class materials, and so on.
Having determined the cost, the school can then decide whether or not to offer the course by weighing the costs and benefits.
Macroeconomics
Examines the aggregate 集体 behavior of the economy (i.e. how the actions of all the individuals and firms in the economy interact to produce a particular level of economic performance as a whole).
Example: Overall level of prices in the economy (how high or how low they are relative to prices last year) rather than the price of a particular good or service.
Difference between microeconomic and
macroeconomic questions.
MICROECONOMIC
QUESTIONS
MACROECONOMIC
QUESTIONS
Go to business school
or take a job?
How many people are employed
in the whole economy?
What determines the salary
薪水 offered by business?
What determines the overall
salary levels paid to workers in
a given year?
Difference between microeconomic and
macroeconomic questions.
What determines the cost to
a university of offering a
new course?
What determines the overall
level of prices in the whole
economy?
What government policies
should be used to make it
easier for poor students to
attend college?
What government policies
should be used to have full
employment and growth in the
whole economy?
MICROECONOMIC
QUESTIONS
MACROECONOMIC
QUESTIONS
Difference between microeconomic and
macroeconomic questions.
What determines
whether Citibank or
Bank of China opens a
new office in Shanghai?
What determines the overall
trade in goods, services
and financial assets
between countries and the
rest of the world?
MICROECONOMIC
QUESTIONS
MACROECONOMIC
QUESTIONS
1.) Command Economy - Government plays the central role in market decision making
i.) What to produce.
ii.) How much to produce.
iii.) How to produce it.
iv.) Who to produce it for.
Determined by
Government
preferences.
Types of Economies
2.) Free Market economy - Decisions about how to allocate分配resources are left up to people themselves.
Types of Economies
i.) What to produce.
ii.) How much to produce.
iii.) How to produce it.
iv.) Who to produce it for.
Determined by
consumers preferences
Determined by
producers seeking profits
Determined by
purchasing power
3.) Mixed economy - Incudes private and public sectors, with only some government control.
Types of Economies
i.) What to produce.
ii.) How much to produce.
iii.) How to produce it.
iv.) Who to produce it for.
Determined by consumers and government preferences
Index 索引 of Economic Freedomfree
北朝鲜# 177
command mixed
古巴# 176
香港# 1
新加坡# 2
美国# 11
中国# 137
加拿大# 6
英国# 14俄国
# 140 德国# 18
法国# 70
巴西# 114
Ways to interpret Economic theory
Positive economics
is the study of what is
结果是基于数据
Normative economics
is the study of what should be
是基于你的愿望是什么结果
2.) Goals
Macroeconomic Goals
1.) Review Intro
Economic growth --经济增长
Full employment --充分就业
Economic efficiency --经济效率
Price level stability --价格水平的稳定
Economic freedom --自由经济体系
Equitable distribution --公平分配
Balance of trade --贸易差额
Macro Economic goals
To make our citizens as happy as possible
To let everyone have a “good” life
To let everyone achieve their dreams
To live in a society that is fair and healthy
To be free of disease and suffering
To make tomorrow better than today
1.) Full employment
About 5% unemployment
2.) Stability (Prices)
3.) Economic growth
4.) Balance of Payments Equilibrium
About 2% inflation
About 3% growth (6-7% in China)
Keep trade deficits low, but no percentage number as a guide
Macro Economic Goals
1.) Full employment
Macro Economic Goals
- Full employment is achieved when all available resources (labor, capital, land, and entrepreneurship) are used to produce goods and services.
- About 5% unemployment
1.) Full employment
2.) Stability (Prices)
- About 2% inflation
Macro Economic Goals
- Stability is achieved by avoiding or limiting fluctuations in production, employment, and prices.
- Stability seeks to avoid the recessionary declines and inflationary expansions of business cycles..
1.) Full employment
2.) Stability (Prices)
3.) Economic growth
- About 3% growth (6-7% in China)
Macro Economic Goals
- Economic growth is achieved by increasing the economy's ability to produce goods and services.
- This goal is best indicated by measuring the growth rate of production.
0
1,000
2,000
3,000
4,000
5,000
6,000
0 100 200 300 400 500 600
Axis
Title
Axis Title
Consumption goods
Capital goods
Economic Growth
- Sustained expansion of the production possibilities frontier
- to have economic growth means to increase the PPF so more can be produced without having to trade-off for as much.
Production Possibilities Curve
This same idea
Time
Short Run
Econ
Growth Long Run
- Looking at trend 趋向over long periods of time.
- Averaging out the short
run.
Business Cycle Model
Trying to stay at or above the long term
trend.
1.) Full employment
2.) Stability (Prices)
3.) Economic growth
4.) Balance of Payments Equilibrium
Keep trade deficits low, but no percentage number as a guide.
Macro Economic Goals
1.) Full employment
About 5% unemployment
2.) Stability (Prices)
3.) Economic growth
4.) Balance of Payments Equilibrium
About 2% inflation
About 3% growth (6-7% in China)
Keep trade deficits low, but no percentage number as a guide
Macro Economic Goals
