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Macroeconomics
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Drill 4/2 So far, everything we have talked about in class has been MICROeconomics. Today we are going to start MACROeconomics. What is Microeconomics, what is Macroeconomics?
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Microeconomics – The study of individual firms, households, etc and their interaction with the market Macroeconomics – The study of the nation’s economy as a whole and it’s interaction with other markets and nations
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Concepts in Macro Unemployment Inflation Taxation Trade Alliances Pacts Globalization
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Macro Principles GDP – The total of a country’s economic output It does NOT account for price changes! This is called Nominal GDP
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Nominal vs Real Year 1 Nominal GDP Year 2 Nominal GDP Year 2 REAL GDP 10 cars @ $15K each + 10 trucks @ 20K each ______________________ GDP – $350, 0000 10 cars @ $16K each + 10 trucks @ 21K each ______________________ GDP – $370, 0000 10 cars @ $15K each + 10 trucks @ 20K each ______________________ GDP – $350, 0000
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Macro Principles REAL GDP GDP expressed in constant, unchanging prices Gross National Product (GNP) Income earned by AMERICAN citizens and firms only.
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Supply and Demand in the Macro world Price Level The average of ALL the prices in the economy Aggregate Supply The total amount of goods and services in the economy available at all prices Aggregate Demand The total amount of goods and services…that will be purchased
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As technology improves we are increasingly becoming a Global Economy Globalization
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Globalization Different countries’ economies becoming more interdependent on one another. The US Economy is linked to Asian markets, which are effected by changes in European markets etc etc. What are some pros and cons of globalization
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Today’s classwork Read pages 318-324 answer questions 1-6. Question number 5 – Market globalization has many critics, some violent. Do you feel that globalization is good or bad?
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Drill 10/23 Define GDP? What is GDP per capita? How does the UN track the development of world nations?
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Drill 10/24 List 3 benefits of Globalization. List 3 drawbacks.
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