Course Description Macroeconomics is the most disputed, confused yet excited field in economics. This course introduces you how economists think about those macroeconomic problems such as inflation, unemployment and recession, and how macroeco could be used to resolve these problems. We will find that economists may give you many different answers. Yet behind their different answers is the difference in the framework of macroeconomic analysis. The course will thus introduce you two major
Introduction The objective of this chapter is to put the previously discussed two models --the models of product market and money market --together and discuss how output and interest rate is determined The model presented in this chapter is often called the IS-LM model (IS: the product market model; LM the money market model)
Gross Domestic Product (GDP) Defintion: GDP is the total market value of all final goods and services produced by a country Final versus Intermediate By final\, we mean the goods and service that are purchased for final use by purchaser and not for resale or further processing. The meaning intermediate is opposite to final
(Continued with question 1 in exercise for chapter 3). Suppose instead of given 2000 there is an investment function which takes the form Above, i is the interest rate. Meanwhile there is a demand function for money Md=1.2Y-20000i Assume that the monetary base is equal to 2000 while the required reserve ratio is 1 ). What is the equilibrium level of output Y and interest rate?