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Class notes Macro economics and Economic Policy (HBA16C) Macroeconomics, Global Edition $6.74   Add to cart

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Class notes Macro economics and Economic Policy (HBA16C) Macroeconomics, Global Edition

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A class note for macroeconomics 2nd year of Bachelor of Business Administration, BBA, KU Leuven. Got 14/20, if wondering.

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  • August 18, 2023
  • 23
  • 2022/2023
  • Class notes
  • Verbeke tom
  • All classes
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Macro-Economics and Economic Policy [HBA16c] Notes of 2022-2023
Chapter 0: Module 0
- 6 modules
- Course material: Oliver Blanchard and David R. Johnson. Macroeconomics: Global edition. 8th
edition, Pearson
- Exam
o MCQs of 48 questions
o Starts at -8 for guess correction
o 4 options
o To pass need 28/48
- Module 2 is the most important part of the course

,Chapter 1: A tour of the world (Module 1)

- Macroeconomists look at and study:
o Output growth
o Unemployment rate
o Inflation rate
o Monetary policy
o Fiscal or budgetary policy
- Multiple crises in the recent decades
o The 2008 banking crisis
o 2012-2013 Greece
o 2020-20xx Covid crisis
- Looking at 4 areas:
o Euro Area
 Tends to have high unemployment rate but a low inflation rate
o The US
 Zero lower bound: an idea saying that interest rates cannot fall below zero
 Tends to have higher inflation rate than euro zone, but lower unemployment
rate
o China
 High population, a lot of output with a rapid growth
o Kenya

, Chapter 2: A tour of the world (Module 1)

- Aggregate output: total amount of output produced and supplied in the economy in a given
period
- Nominal GDP ($Y): the sum of the quantities of final goods produced times their current price
- Real GDP (Y): the sum of quantities of final goods times constant (not current) prices
- Example:




Nominal GDP in 2011: 10 × 20,000 = 200,000 Real GDP in 2011: 10 × 24,000 = 240,000

Nominal GDP in 2012: 12 × 24,000 = 240,000 Real GDP in 2012: 12 × 24,000 = 288,000

Nominal GDP in 2013: 13 × 26,000 = 260,000 Real GDP in 2013: 13 × 24,000 = 312,000

GDP
- GDP per capita =
Population
- Labor force (L): Employment (N) + Unemployment (U)
Labor force
- Labor force participation rate =
working age population
Employed
- Employment rate =
working age population
Enemployed U
- Unemployment rate = or u=
Labor force L
- Inflation is a sustained rise in the general level of prices – the price level.
- Deflation is a sustained decline in the price level.
- Consumer Price Index (CPI) is a measure of the cost of living
- Pure inflation is proportional increase in all prices and wages.


Okun’s law: measures the relationship between the unemployment rate and output
growth rate. The relationship is a negative relationship.

Philip’s curve: measures the relationship between the unemployment rate and
inflation rate. The relationship is a negative relationship.

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