MACROECONOMIC
CHAPTER 1- INTRODUCTION TO MACROECONOMIC
DR. MINH NGUYEN-FACULTY OF ECONOMIC
INTRODUCTION
Economic
Economics is a social science that analyzes the choices that
individuals, businesses, governments, and nations make to allocate
resources to produce the highest value.
Macroeconomic
Macroeconomics is a branch of economics that studies the behavior
of an overall economy, which encompasses markets, businesses,
consumers, and governments. Macroeconomics examines economy-
wide phenomena such as inflation, price levels, rate of economic
growth, national income, gross domestic product (GDP), and changes
in unemployment.
INTRODUCTION
lecturer
Dr. Minh Nguyen
Faculty of Economic
Email:
[email protected] CHAPTERS
CHAPTER 1: Introduction to Macroeconomics
CHAPTER 2: National Income
CHAPTER 3: Economic growth and factor of production
CHAPTER 4: Unemployment
CHAPTER 5: Investment and saving
CHAPTER 6: Money and money multiplier
CHAPTER 7: Money velocity and inflation
CHAPTER 8: Open Economy
CHAPTER 9: Aggregate Demand and Aggregate Supply
CHAPTER 10: Monetary policy and fiscal policy
ASSESSMENT AND MARKING
This course requires students to complete four kind of assessment
Chapter questionaire 10% of total mark ( 3 weekly assignments,
this can include your participation in class question)
Mid term exam 10% of total mark
Group assignment 10% of total mark
Final exam 60% of total mark
Participation 10% of total mark
10 PRINCIPLE OF ECONOMICS
1.People Face Tradeoffs
To get one thing, we usually have to give up something else
Example. Leisure time vs. work
2.The Cost of Something is What You Give Up to Get It
Opportunity cost is the benefit from the next best alternative
foregone.
Example. The opportunity cost of going to college is the money you
could have earned if you used that time to work.
10 PRINCIPLE OF ECONOMICS
3. Rational People Think at the Margin
Marginal changes are small, incremental changes to an existing plan
of action
Ex. Deciding to produce one more pencil or not
People will only take action of the marginal benefit exceed the
marginal cost
4. People Respond to Incentives
Incentive is something that causes a person to act. Because people
use cost and benefit analysis, they also respond to incentives
Ex. Higher taxes on cigarettes to prevent smoking
10 PRINCIPLE OF ECONOMICS
5.Trade Can Make Everyone Better Off
Trade allows countries to specialize according to their comparative
advantages and to enjoy a greater variety of goods and services
6. Markets Are Usually a Good Way to Organize Economic Activity
Adam Smith made the observation that when households and firms
interact in markets guided by the invisible hand, they will produce the
most surpluses for the economy
10 PRINCIPLE OF ECONOMICS
7.Governments Can Sometimes Improve Economic Outcomes
Market failures occur when the market fails to allocate resources
efficiently. Governments can step in and intervene in order to
promote efficiency and equity.
8. The Standard of Living Depends on a Country's Production
The more goods and services produced in a country, the higher the
standard of living. As people consume a larger quantity of goods and
services, their standard of living will increase
10 PRINCIPLE OF ECONOMICS
9.Prices Rise When the Government Prints Too Much Money
When too much money is floating in the economy, there will be
higher demand for goods and services. This will cause firms to
increase their price in the long run causing inflation.
10. Society Faces a Short-Run Tradeoff Between Inflation and
Unemployment
In the short run, when prices increase, suppliers will want to increase
their production of goods and services. In order to achieve this, they
need to hire more workers to produce those goods and services.
More hiring means lower unemployment while there is still inflation.
However, this is not the case in the long-run.
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