EC 202 1st Edition Lecture 6Outline of Last Lecture I. Interdependence among nationsOutline of Current Lecture II. International flowIII. Macroeconomic monetary policyIV. Fiscal policyV. Structural policyVI. Positive vs normative analysisVII. Microeconomics vs macroeconomicsVIII. Big issues of macroeconomicsCurrent Lecture-international flows create political and economic issues-trade impacts jobs-for example, in steel industries, textile industries, and trade agreements (ie North American Free Trade Agreement (NAFTA))-trade imbalances occur when exports and imports differ significantly-trade deficit: occurs when imports are greater than exports-trade surplus: occurs when exports are greater than imports-macroeconomic monetary policy: determination of a nation’s money supply-changes in the money supply affect…-national output-employment-interest rates-inflation-stock prices-international value of the dollar-in the United States these changes are controlled by a central bank called the Federal Reserve System-fiscal policy: decisions that determine the governments budget-expenditures and revenue of the government-deficit: the government spends more than what is collected in taxesThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-surplus: the government spends less than what is collected in taxes-structural policy: a government policy aimed at changing the underlying structure of the nation’s economy-positive statements: what IS-normative statements: what OUGHT to be-the task of economic science: to discover and catalog positive statements that are consistent with what we observe in the world and that enable us to understand how the economic world works-microeconomics: “ground level”-studies individual units-macroeconomics: “big picture” -studies summations or aggregates-big issues of macroeconomics1. standard of living2. cost of living3. economic fluctuations (recessions and
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