1. Macroeconomics

2. 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?

3.  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

4. Concepts in Macro  Unemployment  Inflation  Taxation  Trade  Alliances  Pacts  Globalization

5. Macro Principles  GDP – The total of a country’s economic output  It does NOT account for price changes!  This is called Nominal GDP

6. Nominal vs Real Year 1 Nominal GDP Year 2 Nominal GDP Year 2 REAL GDP 10 cars @ $15K each + 10 trucks @ 20K each ______________________ GDP – $350, 0000 10 cars @ $16K each + 10 trucks @ 21K each ______________________ GDP – $370, 0000 10 cars @ $15K each + 10 trucks @ 20K each ______________________ GDP – $350, 0000

7. Macro Principles  REAL GDP  GDP expressed in constant, unchanging prices  Gross National Product (GNP)  Income earned by AMERICAN citizens and firms only.

8. 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

9.  As technology improves we are increasingly becoming a Global Economy  Globalization

10. 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

12. 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?

13. Drill 10/23  Define GDP? What is GDP per capita?  How does the UN track the development of world nations?

14. Drill 10/24  List 3 benefits of Globalization. List 3 drawbacks.