1. Economics: Notes for Teachers
Introduction to Macroeconomics
Introduction to MACROECONOMICS
Academic PowerPoint

2. What is Economics?
“Economics is the science which studies human behaviour as a relationship between ends (wants and needs) and scarce means (resources) which have alternative uses.”
Lionel Robbins 1930’s

3. What is Economics?
Economics studies human behaviour and is therefore a social science like geography, history, anthropology and sociology as opposed to a physical science such as chemistry.

4. The Economic Problem
The economic problem exists because societies have limited resources with which to satisfy unlimited wants and needs.
The economic problem applies to everyone: individuals, groups, communities and countries.

5. The Economic Problem
It is an ongoing problem which can never be solved because the amount of resources which can be used for production of goods and services will never be enough to satisfy all wants.

6. The Economic Problem
Economists often use the term ‘relative scarcity’ to describe the problem of too many wants and needs and insufficient resources to satisfy those ends.

7. The Economic Problem
A good is said to be relatively scarce, when it is scarce in relation to demand for it.
Goods that are scarce relative to wants may be termed ‘economic goods’. The term ‘goods’ covers both commodities and services.
Examples of economic goods include: diamonds, a top twenty band, oxygen on the moon.

8. The Economic Problem
In contrast to economic goods there are free goods, like the air we breathe or the rain that falls. No payment is made for such goods.
A small list of free goods exists. Ice is free in the North Pole and it would be futile for a businessperson to set up a shop selling ice to the Eskimos.

9. Relevance & Reasons for Studying Economics
Economics is important because we need to explain economic phenomena, to make accurate predictions based on this and to formulate policy to compliment the situation. It is relevant because economics affects the standard of living and welfare of the whole community.

10. Branches of Economics
Microeconomics concerns the behaviour of single economic agents or units such as consumers or households, firms and product and factor markets.

11. Macroeconomics
Macroeconomics is the study of the economy as a whole or economic aggregates such as production, expenditure and income.

12. Macroeconomic Objectives
There are a number of macroeconomic aims, including:
- Sustainable economic growth
- External balance – stable exchange rate at acceptable level, sustainable balance of payments position and manageable level of foreign debt
- Price stability
- Full employment

13. Economic Indicators
There are three types of economic indicators, categorised according to the timing of the relationship between changes in individual indicators and changes in the general level of economic activity.

14. Economics: Notes for Teachers
Introduction to Macroeconomics
Economic Indicators
Leading indicators predict or anticipate a change in economic activity before a trend becomes apparent. Examples include building approvals, inventory levels and job advertisements.
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15. Economic Indicators
Coincident indicators are those that move in line with the level or changing direction of economic activity. They are consistent with what is happening.
e.g. GDP figures, retail sales.

16. Economic Indicators
Lagging indicators confirm the economic trend. They react to developments that have occurred in the past.
Examples include unemployment (this is because people are slow to react to economic conditions) and consumer debt levels.

17. The Role of the Government
In most countries, the Government takes on a central role in the macroeconomic management of the country.
Governments can implement fiscal and/or monetary policies to help achieve their macroeconomic objectives.

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