Lesson 1, Topic 3
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Topics studied in macroeconomics

Abdulaziz July 22, 2020
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The unemployment rate

  • fraction of the labor force that wants work but does not currently have a job.
  • Why has unemployment in Europe been twice as high as unemployment in the USA in the past two decades?
  • Which region had higher unemployment in 1960, the USA or Europe?
  • Why does Japan have such low unemployment?
keyboard, button, key

The inflation rate

  • rate at which prices are increasing in an economy.
  • What determines the rate of inflation?
  • What determines the price level and how quickly prices rise?
  • Why was inflation so high in the 1970s
  • How and why did inflation start falling so
  • dramatically in the 1980s?
2020 recession prediction
2020 recession prediction

Government Policy

  • Government use of policy to direct or stabilize the economy
    • fiscal policy
    • monetary policy

Budget deficit

  • government borrows money to finance spending.
  • occurs if (Government spending) > (Tax revenues)

Trade deficits

  • Occur when one economy borrows from another.
  • This happens on an international level.