PRESENTATION ON THE INTRODUCTIONTO  MACROECONOMICS

1. PRESENTATION ON
THE INTRODUCTION
TO
MACROECONOMICS
BY
GROUP (A)
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2. • ECONOMICS: Economics is a social science
concerned with the production, distribution,
and consumption of goods and services. It
studies how individuals, businesses,
governments, and nations make choices on
allocating resources to satisfy their wants and
needs, trying to determine how these groups
should organize and coordinate efforts to
achieve maximum output.
• MACROECONOMICS: Macroeconomics is a
branch of economics that studies how an
overall economy—the market systems that
operate on a large scale—behaves.
Macroeconomics studies economy-wide
phenomena such as inflation, price levels, rate
of economic growth, national income, gross
domestic product (GDP), and changes
in unemployment.

3. THE ROOTS OF
MACROECONOMICS
• MACROECONOMICS: Macroeconomics studies economy-wide
phenomena such as inflation, price levels, rate of economic growth,
national income, gross domestic product (GDP), and changes
in unemployment. Macroeconomics, as it is in its modern form, is
often defined as starting with John Maynard Keynes and the
publication of his book
• The General Theory of Employment, Interest and Money in
1936.Keynes offered an explanation for the fallout from the Great
Depression, when goods remained unsold and workers unemployed.
• JOHN MAYNARD KEYNES was a British economist, whose ideas
fundamentally changed the theory and practice
of macroeconomics and the economic policies of governments.
• BORN: 6 June 1883

4. THE GREAT DEPRESSION
• THE GREAT DEPRESSION: The Great Depression
was the greatest and longest economic
recession in modern world history. It began
with the U.S. stock market crash of 1929 and
did not end until 1946 after World War II.
Economists and historians often cite the Great
Depression as the most catastrophic economic
event of the 20th century. During this event
1. STOCK MARKETS CRASHED
2. 9000 BANKS FILED FOR BANKRUPTEY
3. PEOPLE CUT DOWN SPENDING AND MUCH
MORE

5. MICROECONOMICS
VS
MACROECONOMICS
• MICROECONOMICS: Microeconomics is the social
science that studies the implications of human
action. How individuals make more efficient or
more productive decisions, and how individuals best
coordinate and cooperate with one another.
Generally speaking, microeconomics is considered a
more complete, advanced, and settled science
than macroeconomics.
• MACROECONOMICS: Macroeconomics is a branch
of economics that studies how an overall
economy—the market systems that operate on a
large scale—behaves. Macroeconomics studies
economy-wide phenomena such as inflation, price
levels, rate of economic growth, national
income, gross domestic product (GDP), and
changes in unemployment.

6. ISSUES ADDRESSED BY MACROECONOMICS
1. Employment and Unemployment: Unemployment refers to involuntary idleness of resources including manpower. If this problem exists, society’s
actual output (or GNP) will be less than its potential output.
2. Inflation: It refers to a situation of constantly rising prices of commodities and factors of production. The opposite situation is known as deflation.
During inflation some people gain and most people lose
3. The Trade Cycle: It refers to periodic fluctuations in the levels of economic or business activities, i.e., the tendency for output (GNP) and
employment to fluctuate over time in a recurring sequence of ups and downs.
4. Stagflation: Most modern mixed economics suffer from the disease of stagflation which implies the co-existence of inflation and unemployment in a
stagnant economy. Every country in the world is now struggling hard to fight the disease of stagflation.
5. Economic Growth: In spite of short-term fluctuations of output that are associated with the trade cycle, the long-term trend of total output has been
upward in most industrially advanced country. The trend in the nation’s total output over the long period is known as economic growth.
6. The Exchange Rate and the Balance of Payments: The balance of payments is a systematic record of all economic transactions between the mem-
bers of the home country and the rest of the world in an accounting year. These transactions are largely, if not entirely, influenced by the exchange
rate. It is the rate at which a country’s economy is exchanged for another currency (or gold).

7. CIRCULAR FLOW OF INCOME IN AN
ECONOMY
• THE EXTERNAL TRADE SECTOR
OF THE ECONOMY
• THE DOMESTIC CIRCULAR FLOW
OF INCOME: IT IS MADE UP OF
HOUSEHOLD, GOVERNMENT
AND FIRMS.