Macroeconomics

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Macroeconomics by Mind Map: Macroeconomics

1. Government's main economic objectives

1.1. Low inflation

1.2. Steady and sustained growth

1.3. High levels of employment

1.4. Improvements in living standards

2. Indicators

2.1. Real GDP growth

2.1.1. Jobs - unemployment and emplopyment rates

2.1.2. Prices - annual change in the consumer price index

2.1.3. Trade balances and measures of competitiveness

2.1.4. Productivity of labour and capital inputs

2.1.5. Average standard of living e.g. measured by per capita GDP (PPP adjusted)

2.1.6. Quality and accessibility of public services

3. The macroeconomic performance of any one nation is affected by events, policies and shocks in other countries. No economy is immune to what is happening in the global financial and economic system.

4. The fall out from the credit crunch and a recession in global trade, production and jobs has made it abundantly clear for people and businesses in Britain just how inter-connected the world is in an economic sense.

5. Why does output grow over time ?

5.1. Reserach and development

5.2. Education and training

5.3. Technology advances

5.4. Specialisation and Division of labour

5.5. Trend output over time

5.6. Potential GDP

5.7. Actual output in UK

6. Do standards of living always rise in line with potential output ?

7. Stages of Business cycle

7.1. Economic growth

7.1.1. Upswing in the level of economic activity in a year

7.2. Boom

7.2.1. Economy's at its peak of level of economic activity in a year

7.3. Recession

7.3.1. Downswing in the level of economic activity in a year

7.4. Slump

7.4.1. Level of economic activity is at it's lowest in a year

7.5. Recovery

7.5.1. Economy recovers from a recent recession

8. Factors affecting Aggregate demand (Consumption, Investment, Government Spending.

8.1. Real consumer disposable income

8.2. Interest rates

8.3. Economic cycle

8.4. Inflation

8.5. Exchange rate

8.6. Unemployment

8.7. Weather/Climate

8.8. Expectation/Speculation

8.9. Consumer confidence

8.10. National debt

8.11. Tax rates

8.12. War

8.13. Politics/Elections

9. Factors affecting Saving

9.1. Inflation rate

9.2. Interest rate

9.3. Mortgage rate

9.4. Expectations

9.5. Tax rates

9.6. Pension schemes

9.7. Unemployment rate

9.8. Consumer confidence

9.9. Economic cycle

9.10. Opportunity cost

10. Unemployment

10.1. Structural

10.1.1. Whole industries close down

10.2. Classical

10.2.1. Too high wage expectations

10.3. Cyclical

10.3.1. Caused by an economic recession

10.4. Frictional

10.4.1. Time period when someone moves from one job to another

10.5. Seasonal

10.5.1. Caused by changes in season and weather

10.6. Hidden

10.6.1. People who don't take part in claimant count

11. Inflation

11.1. Cost-Push Inflation

11.1.1. Increase in costs of production for firms causes prices to rise

11.2. Demand-Pull Inflation

11.2.1. Excess aggregate demand causes an increase in prices

11.3. Imported Inflation

11.3.1. Importing inflated goods from countries experiencing increasing inflation

11.4. Money supply

11.4.1. Increasing money supply in the economy would cause people to have more money and thus increase aggregate demand which causes prices to rise

12. Current Account

12.1. Trade in goods

12.2. Trade in services

12.3. Net income inflows

12.4. Net transfers

12.5. Weaker Exchange rate=Increase in exports(Cheaper=Decrease in Imports(more expensive)

12.6. Stronger exchange rate=Decrease in exports(more expensive)=Increase in imports(cheaper)