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The national economy

The national economy. Introduction to Macroeconomics Mr E Mc Kee 2002. Macro economics. Is a study of the working of the whole economy. It examines aggregate levels of price, income, employment etc Sometimes described as the world of totals. Macro economic objectives.

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The national economy

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  1. The national economy Introduction to Macroeconomics Mr E Mc Kee 2002

  2. Macro economics • Is a study of the working of the whole economy. • It examines aggregate levels of price, income, employment etc • Sometimes described as the world of totals

  3. Macro economic objectives. • Full employment: low unemployment • Price stability: low inflation • High but sustainable levels of economic growth. • Equilibrium on the balance of payments.

  4. Full employmentlow unemployment.

  5. Price stabilitylow inflation

  6. High but sustainable levels of economic growth.

  7. Equilibrium on the balance of payments.

  8. How can governments achieve the objectives? • Fiscal policy • Monetary policy • Trade policy • Direct controls • Supply side policies

  9. What difficulties do governments face when trying to manage the economy? • External (exogenous) shocks • Internal (endogenous) reactions • Speed of impact of policy measures • Forecasting difficulties • Incompatibility of objectives • Different schools of economic thought (Keynesian or Monetarist)

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