MACRO - Chapter 1

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MACRO - Chapter 1
2013-12-06 17:57:14
Macroeconomics Microeconomics

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  1. The Great Recession
    Economic downturn of 2008-2009
  2. The Great Depression
    Economic downturn between 1929-1933
  3. Government Blunders
    Macro Economics looks at and grows out of the decisions that would made that made the great depression last as long as it did.
  4. Fallacy of Composition
    What is true for one is not true for all whole is greater than the sum of the parts.
  5. Pardox of Thrift
    attempts to increase savings cause aggregate savings to decrease because of falling employment and incomes.
  6. Input Markets
    Determine incomes households are sellers and businesses are buyers
  7. Output Markets
    Determine the value of all products/services sold households are buyers and businesses are sellers
  8. Business Cycles
    ups and downs of overall economic activity
  9. Says Law
    Supply creates its own demand
  10. Government Failure
    Government policy fails to serve the public interest.
  11. GDP
    (Gross Domestic Product) Value of all final products and services produced annually in Canada.
  12. Is High GDP or Low GDP Good?
    High GDP per person is good, Higher GDP means there is more goods and services to satisfy the wants.
  13. Unemployed
    Not employed but actively looking for work.
  14. Inflation
    When the value of money falls but the prices keep rising.
  15. Investment Spending
    Business purchases of new factories and equipment (Long term Assets)
  16. Consumer Choices
    To spend or save AND to buy canadian made products or imports
  17. Business Choices
    To hire labour, AND to buy local supplies or imports. Also they have to choose to either sell locally, or export.
  18. Fiscal Policy
    Changes in government purchases and taxes/transfers to achieve microeconomic outcomes of steady growth full employment and stable prices
  19. Monetary Policy
    Bank of Canada changes interest rates and the supply of money to achieve macroeconomic outcomes of steady growth full employment and stable prices.
  20. R.O.W. Choices
    (ROW = Rest of world) They choose to export goods from canada and to import goods to Canada. This explains the connection Canada has with the rest of the world.