Macroeconomics For Dummies®, uk edition Published by: John Wiley & Sons, Ltd

Looking at Key Questions and Concepts


In This Chapter


Understanding the vital questions that interest macroeconomists


Watching as economists model the world around them


Introducing the important macroeconomic ideas
Macroeconomists are a pretty ambitious bunch. They try to explain and predict the behaviour of the economy as a whole. As a result, macroeconomics attempts to answer some of the biggest questions around: why are some countries rich and others poor? What causes inflation? How can nations reduce unemployment? Why do countries experience recessions?

As you can imagine, sorting out these and other questions is no easy task. Unsurprisingly, macroeconomists disagree about many of these issues. Nevertheless, a common body of knowledge has developed on which most macroeconomists agree.

In this chapter, we present the central questions that fascinate macroeconomists. You also see how economists look at the world and how this helps them to answer difficult questions. Finally, we introduce some concepts in economics that frequently confuse newcomers. By nipping them in the bud now, you will be well on your way to understanding the economy!

Seeing the Questions that Intrigue Macroeconomists

If you want to understand something, the obvious starting point is to ask pertinent questions: why does the phone ring as soon as you step into the shower? Why is it almost impossible to find a matching pair of socks? What’s the point of celebrity chefs?

This section introduces the key questions of interest to macroeconomists and gives you an idea about why these questions are important. The ideas introduced here come up over and over again in this book, so don’t worry if you still have questions the first time around – we’ll do our best to answer them!

In this section we take a look at some of the core questions that keep macroeconomists up at night (fortunately none involve Gordon Ramsey!).