macroeconomics the business cycle. how does macro differ from micro? read the introductory material...
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![Page 1: MACROECONOMICS The Business Cycle. HOW DOES MACRO DIFFER FROM MICRO? Read the introductory material on pages 211-212 and discuss the following with](https://reader036.vdocuments.net/reader036/viewer/2022062804/5697bf9c1a28abf838c934d4/html5/thumbnails/1.jpg)
MACROECONOMICS
The Business Cycle
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HOW DOES MACRO DIFFER FROM MICRO?
Read the introductory material on
pages 211-212 and discuss the
following with seat-partners:• What hardships resulted from the
economic collapse in the Great Depression?• How did the Great Depression help
create modern macroeconomics?
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KEY TERMS
Macroeconomics• Definition:
Business Cycle• Definition:
Relationship• The basic purpose of macro economics is
____________.• Macro policy tries to __________.
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THREE FUN DAMEN TAL QUEST IONS OF THE BUSIN ESS CYCLE
What are business cycles?
What damage does unemployment cause?
Who is hurt by inflation?
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ASSESSING MACRO PERFORMANCE
Three basic measures of macroeconomic
performance:• Output (GDP) Growth
• GDP definition:
• Unemployment
• Inflation
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GDP GROWTH
Production Possibilities Curve• Are we producing at or near the production frontier?• Are we pushing the frontier outward?
Nominal GDP vs. real GDP• Nominal GDP:• Real GDP:
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GROWTH IS ERRATIC
Real GDP increases inconsistently• Pattern of steps, stumbles, and
setbacks• See Figures 10.1, 10.2
Recession:• definition:• Figure 10.2
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WORK WITH SEAT PARTNER
Page 231•Problem #1 (a-c)