Introduction to Macroeconomics



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MACROECONOMICS

Intro…

Intro…


MACRO…
Issues Addressed by Macroeconomics

In 1870, income per capita was smaller in Norway than in Argentina. But today, income per capita is almost three times higher in Norway than Argentina.

  • So, Why?
  • - Rich nations have experienced extended periods of rapid economic growth.

    • Poor nations either have never experienced them or economic growth was offset by economic decline.

LONG-RUN ECONOMIC GROWTH

Intro…


MACRO…
Over the past 145 years, the annual output of U.S. goods and services has increased by more than 140 times.

Intro…


MACRO…

Intro…

Intro…


MACRO…
Issues Addressed by Macroeconomics

Increased Output

Why do some nations` economies grow quickly, providing their citizens with rapidly improving living standards, whereas other nations` economies are relatively stagnant?

Total output is increasing because of increasing population, i.e. the number of available workers.

Increasing average labor productivity: the amount of output produced per unit of labor input.


LONG-RUN ECONOMIC GROWTH

Intro…


MACRO…
In 2014, the average U.S. worker produced more than seven times as much output as the average worker at the beginning of the twentieth century.
Because today’s typical worker is so much more productive, Americans enjoy a significantly higher standard of living than would have been possible a century ago.

Intro…

Intro…


MACRO…
Issues Addressed by Macroeconomics

Because the rates of growth of output and, particularly, of output per worker ultimately determine whether a nation will be rich or poor, understanding what determines growth is one of the most important goals of macroeconomics.


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