Econ 104 1st Edition Lecture 1 Outline of Last Lecture I This is the first Lecture Outline of Current Lecture II This is macroeconomics III Current Macroeconomic Challenges of Washington D C IV Other examples of Macro Questions Current Lecture I II This is macroeconomics a Focusing on the economy of a nation vs microeconomics which dealt with the economic decisions of households i Macro deals with inflation unemployment national growth GDP b Economics is the study of mankind in the ordinary business of life Alfred Marshall c The prefix makrois Greek and means large oikosmeans house and nomos means law d Why is studying macroeconomics so important i It can answer the tough questions 1 Is the economy expanding or contracting 2 How does all of this affect the management of my finances and the business that I own Current Macroeconomic Challenges of Washington D C a The current state of the economy i One way of showing this is the United States Output Clock 1 This shows what we ARE producing vs what we SHOULD be producing The difference between these lines are the jobs lost bankruptcies home foreclosures and businesses closing 2 There was declining output from Dec 07 to June 09 during the great recession b Understanding why job creation is slow i Can be shown through a graph of Total Number of Nonfarm Jobs This shows potential employment and actual employment 1 By September 2019 we should be back at the potential employment if we keep adding jobs at the current rate These 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 III 2 9 million jobs lost at the end of the recession 3 Jobs aren t being created because of low demand for output c The national debt i The debt clock keeps ticking Other examples of Macro Questions a Should student loans be subsidized i Student debt credit card debt ii July 2013 student loan interest rate jumped from 3 4 to 6 8 iii To fix this the government could 1 Borrow more 2 Cut back on other expenditures 3 Raise taxes 4 End the subsidies a In the end it was voted to end the subsidies b Obama wants to raise minimum wage from 7 25 to 10 10 i PROS 1 Move above poverty line 2 Increased demand for goods and services 3 Higher wage reduces turnover 4 Raise worker productivity 5 Keep wage up with inflation ii CONS 1 Price of goods rise 2 Less people hired 3 Workers replaced by machines
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