Intro to Macro Notes
Macroeconomics Lecture Notes
Scarcity: A situation in which unlimited wants exceed the limited resources available to fulfill those wants
Economics: The study of the choices people make to attain their goals, given their scarce resources.
Economic Model: A simplified version of reality used to analyze real-world economic situations. Often based on unrealistic assumptions that simplify the problem at hand without substantially affecting the validity of the answer
No one model can address every important topic, so we will learn diff models as we study diff topics
Economic analysis may be positive or normative:
Positive analysis: Analysis concerned with what is
Positive statements can be evaluated as true or false using only data.
For example, “After speeding cameras were installed on I-38, the average speed of motorists decreased.”
Normative analysis: Analysis concerned with what ought to be.
Normative statemnts involve personal values, so they cannot be evaluated as true or flase using only data
“the governemtn should install addition speeding cameras on 1-380
Economics is studied on two levels:
Microeconomics: The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
Macroeconomics: The study of the economy as a whole including topics such as inflation, unemployment, and economic growth.
Micro and macro are closely interwined because changes in the overall economy arise from the decisions of individual households and firms.
CHAPTER 2
Trade off: The idea hat because of scarcity, producing more of one good or service means producing less of another good or service
PPF: A curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology
The PPF is an economic model used to analyze the tradeoffs that individuals firms, and countries face when deciding how to
Scarcity: A situation in which unlimited wants exceed the limited resources available to fulfill those wants
Economics: The study of the choices people make to attain their goals, given their scarce resources.
Economic Model: A simplified version of reality used to analyze real-world economic situations. Often based on unrealistic assumptions that simplify the problem at hand without substantially affecting the validity of the answer
No one model can address every important topic, so we will learn diff models as we study diff topics
Economic analysis may be positive or normative:
Positive analysis: Analysis concerned with what is
Positive statements can be evaluated as true or false using only data.
For example, “After speeding cameras were installed on I-38, the average speed of motorists decreased.”
Normative analysis: Analysis concerned with what ought to be.
Normative statemnts involve personal values, so they cannot be evaluated as true or flase using only data
“the governemtn should install addition speeding cameras on 1-380
Economics is studied on two levels:
Microeconomics: The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
Macroeconomics: The study of the economy as a whole including topics such as inflation, unemployment, and economic growth.
Micro and macro are closely interwined because changes in the overall economy arise from the decisions of individual households and firms.
CHAPTER 2
Trade off: The idea hat because of scarcity, producing more of one good or service means producing less of another good or service
PPF: A curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology
The PPF is an economic model used to analyze the tradeoffs that individuals firms, and countries face when deciding how to