ECN 204 Lecture Notes - Lecture 1: Aggregate Supply, Nominal Rigidity, Final Good
23 Feb 2017
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Chapter 6 and chapter 7: introduction to macroeconomics and measuring domestic output and the price level. Macroeconomics: it will ultimately help us make decisions: long run economic growth. X axis = time, y axis = real gdp. Explain why economists focus on gdp, unemployment, and inflation when assessing the health of an entire economy and what policy to pursue. Discuss why sustained increases in living standards are historically recent phenomena. Identify why saving and investment are key factors in promoting rising living standards. Describe why expectations, shocks, and sticky prices are responsible for short-run fluctuations in output and employment. Characterize the degree to which various prices in the economy are sticky. Explain why the greater flexibility of prices as time passes causes economists to use different macroeconomic models for different time horizons. 6. 1) assessing the health of the economy: performance and policy. In assessing the health and development of an economy, macroeconomists focus on: real gdp (real gross domestic product)
