Macroeconomics
Drill 4/2
 So far, everything we have talked about
in class has been MICROeconomics.
Today we are going to start
MACROeconomics.
 What is Microeconomics, what is
Macroeconomics?
 Microeconomics – The study of individual
firms, households, etc and their
interaction with the market
 Macroeconomics – The study of the
nation’s economy as a whole and it’s
interaction with other markets and
nations
Concepts in Macro
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Unemployment
Inflation
Taxation
Trade
Alliances
Pacts
Globalization
Macro Principles
 GDP – The total of a country’s economic
output
 It does NOT account for price changes!
 This is called Nominal GDP
Nominal vs Real
Year 1
Nominal GDP
Year 2
Nominal GDP
Year 2
REAL GDP
10 cars @ $15K each
10 cars @ $16K each
10 cars @ $15K each
+ 10 trucks @ 20K each
+ 10 trucks @ 21K each
+ 10 trucks @ 20K each
______________________ ______________________ ______________________
GDP – $350, 0000
GDP – $370, 0000
GDP – $350, 0000
Macro Principles
 REAL GDP
 GDP expressed in constant, unchanging
prices
 Gross National Product (GNP)
 Income earned by AMERICAN citizens and
firms only.
Supply and Demand in the
Macro world
 Price Level
 The average of ALL the prices in the
economy
 Aggregate Supply
 The total amount of goods and services in
the economy available at all prices
 Aggregate Demand
 The total amount of goods and
services…that will be purchased
 As technology improves we are
increasingly becoming a Global Economy
 Globalization
Globalization
 Different countries’ economies becoming
more interdependent on one another.
 The US Economy is linked to Asian markets,
which are effected by changes in European
markets etc etc.
 What are some pros and cons of
globalization
Today’s classwork
 Read pages 318-324 answer questions
1-6.
 Question number 5 – Market
globalization has many critics, some
violent. Do you feel that globalization is
good or bad?
Drill 10/23
 Define GDP? What is GDP per capita?
 How does the UN track the development
of world nations?
Drill 10/24
 List 3 benefits of Globalization. List 3
drawbacks.