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Macroeconomics by Mind Map: Macroeconomics
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Macroeconomics

Chapter 1 :macroeconomics

Macroeconomic performance

definition

the supply side policies(medium and long term), competition, entrepreneurship, capital goods, research and development, technology, innovation, labour, education,training,skills, performance related pay, decreased union power, reduced benefits, lower income tax, immigration

trend output and actual output, graph

business cycle

normal rates of capacity utilisation

spare capacity and full capacity

output gap, positive output gap, inflation and unemployment, negative output gap, inflation and unemployment

recession

inflation, demand-pull inflation, cost-push inflation

the circular flow of income

households and firms, monetary flow, real flow, withdrawal=s+t+m, injection=i+g+x

macroeconomic performance

demand-side policies(short and medium term), fiscal and monetary policies, effects on positive output gap and negative output gap

Chapter 2: Economic Growth

introduction

National output=National expenditure=National income

GDP, IPD(flow out and flow in), Balance of these inflows of outflows:NPIFA, GNP=GDP+NPIFA

income is not the same as wealth

real and nominal values

real GDP=nominal GDP - inflation

nominal values:expressed in current prices=money terms(compare to real terms), money GDP money wages

economic growth

definition

long term, productive capacity increases, Supply side policies

short term(the percentage change in real GDP)

diagram, long term: shift outwards, short term:move on to the frontier, capital goods:shift more, consumer goods: shift less

distinction between levels and rates of change, GDP growth:in percentage, recession

AD and AS analysis

demand-side policies and supply-side policies

long-term growth(graph)

AD=C+I+G+(X-M)

A change in price leads to movement along:1.AD curve 2.AS curve

short run and long run

definition

the diagram

output gap diagram(LRAS doesn't shift)

GDP per capita

living standard

not measure welfare

index number

in order to compare numbers

index number=......

Chapter 3:Unemployment

definition

measure, Claimant count, Labour Force survey

causes and curing unemployment

Cyclical unemployment, negative output gap, Demand-side policies

structural unemployment, decline in old industries, workers wrong skills, supply-side policies

frictional unemployment, people in between jobs, supply-side plocies

seasonal unemployment, regular fluctuations, supply-side plocies

classical unemployment, real wage above the labour market equilibrium, supply-side plocies

the cots of unemployment

loss of income

lose skills

government pay benefits

low tax revenue

forgone output

runs inside ppc

indicator to full capacity

Chapter 4:Inflation

Introduction

definition

measure, CPI or RPI

Measuring Inflation

CPI(official)

typical basket of goods

RPIX

Causes of Inflation

demand-pull, demand-side, graph, positive output gap

cost-push, supply-side, graph, costs, taxes, wages, raw materials(exchange rate)

Why is inflation a problem

government promote a fair distribution of income

savers to borrowers

higher wages

country less competitive

reduction in investment

menu costs

price signals will become blurred

curing Inflation

suppress the level of economic growth

supply-side policies

demand-side policies, monetary policy, bank of england, fiscal policy

Evaluation

monetary policy.......

fiscal policy..

Supply-side policies

Deflation

definiton

3 dangers

Factors that the rate of inflation in real world

wage growth

the exchange rate

immigration

information technology

globalisation

Chapter 5:The Current Account

Introduction

more choices

closed and open economy

international division of labour

The balance of payments

balance of trade in goods+balance of trade in services+net income inflows+net transfers

current account deficit

visibles and invisibles

Factors affecting the current account balance

demand side and supply side

chains of reasons

inflation higher

non-price factors

exchange rate

definition

depreciation and appreciation

SPICED

Current account and macroeconomic performance

X as a part of AD, diagram, chain of reasons, diagram, chain of reasons

EVALUATION

A table(summary)

Improving the economy's external performance

expenditure dampening

expenditure switching

non-price competion

WTO: against protectionist policies