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MACROECONOMICS
TENTH EDITION
PART II Concepts and Problems in Macroeconomics
Introduction to
Macroeconomics 5
CHAPTER OUTLINE
Macroeconomic Concerns
Output Growth
Unemployment
Inflation and Deflation
The Components of the Macroeconomy
The Circular Flow Diagram
The Three Market Arenas
PART II Concepts and Problems in Macroeconomics
Output growth
Unemployment
Output Growth
Output Growth
Output Growth
is in recession.
Output Growth
PART II Concepts and Problems in Macroeconomics
Unemployment
To see the big picture, it is helpful to divide the participants in the economy into
four broad groups:
(1) Households.
PART II Concepts and Problems in Macroeconomics
(2) Firms.
Goods-and-Services Market
Labor Market
PART II Concepts and Problems in Macroeconomics
Money Market
Money Market
fine-tuning The phrase used by Walter Heller to refer to the governments role
in regulating inflation and unemployment.
PART II Concepts and Problems in Macroeconomics
Macroeconomics in Literature
Aggregate
FIGURE 5.4 Aggregate
output in the Output
United(Real GDP),
States 1970
since I2010
1970 hasI risen overall, but there have been five
recessionary periods: 1974 I1975 I, 1980 II1982 IV, 1990 III1991 I, 2001 I2001 III, and 2008 I2009
II.
FIGURE 5.6 Inflation Rate (Percentage Change in the GDP Deflator, Four-Quarter Average), 1970 I2010 I
Since 1970, inflation has been high in two periods: 1973 IV1975 IV and 1979 I1981 IV.
Inflation between 1983 and 1992 was moderate.
Since 1992, it has been fairly low.
depression stagflation
Great Depression
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