THIS COURSE IS THE SECOND OF A SERIES OF A YEAR-LONG COURSE IN ECONOMIC REASONING DESIGNED FOR UNDERGRADUATE STUDENTS. IT INTRODUCES BASIC INQUIRY INTO THE WORKINGS AND INTERRELATIONSHIPS OF THE AGGREGATE ECONOMIC SYSTEM. THE PRIMARY FOCUS IS ON TOTAL PRODUCTION AND ITS DISTRIBUTION, EMPLOYMENT AND PRICE LEVELS, AND THE FORCES INFLUENCING THEM. OTHER CONSIDERATIONS ARE THE ROLES OF GOVERNMENT, THE MONETARY SECTOR, AND RELATED AREAS. NO PREREQUISITES.
MACROECONOMICS IS THE STUDY OF ISSUES THAT AFFECT THE ECONOMY AS A WHOLE, ESPECIALLY UNEMPLOYMENT, INFLATION, AND ECONOMIC GROWTH. MACROECONOMICS ASKS SUCH QUESTIONS AS: WHY IS THERE UNEMPLOYMENT? WHY IS THERE INFLATION? WHAT CAUSES AN ECONOMY TO GROW? WHY DO DIFFERENT ECONOMIES GROW AT DIFFERENT RATES? WHAT POLICIES WILL ACHIEVE SATISFACTORY RATES OF UNEMPLOYMENT, INFLATION, AND GROWTH?
THE GENERAL ANSWER TO THE FIRST FOUR QUESTIONS APPEARS SIMPLE: SOMEHOW, UNEMPLOYMENT, INFLATION, AND GROWTH ARE THE COLLECTIVE RESULT OF THE DECISIONS THAT THE 6 BILLION PEOPLE IN THE WORLD MAKE ABOUT SUCH ISSUES AS HOW MUCH TO CONSUME, SAVE, WORK, PRODUCE, AND INVEST. THE SPECIFIC ANSWER, HOWEVER, IS MORE COMPLICATED. THESE DECISIONS INVOLVE THE INTERRELATIONSHIPS AND INTERDEPENDENCIES OF TRILLIONS OF DAILY DECISIONS. NEVERTHELESS, HOW THEY ALL WORK OUT IS WHAT MACROECONOMIC THEORY IS ALL ABOUT. THE ANSWER TO THE FIFTH QUESTION — THE POLICY QUESTION — IS EVEN MORE COMPLICATED BECAUSE IT DEPENDS ON THE ANSWERS TO THE FIRST FOUR QUESTIONS.