IV.

SESSION FOUR
MICROECONOMICS AND MACROECONOMICS

Macroeconomics

Macroeconomics refers to the 'big picture' study of economics, so looking at concepts like
industry, country, or global economic factors. Macroeconomics includes looking at concepts like
a nation's Gross Domestic Product (GDP), unemployment rates, growth rate, and how all these
concepts interact with each other.

Studying and applying macroeconomics is incredibly important at the government level as the
policy and economic decision and regulations enacted by government can have a major impact
on many aspects of the overall economy. To demonstrate macroeconomic theory in practice we'll
briefly look at how interest rates fit into macroeconomic policy.

Extensive study goes into establishing the appropriate interest rates in an economy, where the
government sets a base rate and banks work from there. If interest rates go up:
 People may save more money as they get a better return on their deposits.
 Business will invest in less expansion as borrowing money will cost relatively more.
 The local currency will go up in value because now deposits in that currency can earn
more compared to other currencies.
 Inflation will go down, because in general saving is up and spending is down and people
are buying less.
The opposite would be expected for each point if interest rates go down.

This gets very complex because 'relatively go up' or 'relatively go down' are very loose
relationships and many factors impact decision making also (i.e. taxes & employment rates).
Then the impact of the policy decisions of other countries have to be considered also as they
impact what happens to a countries economy also.

In theory, macroeconomics can be easy because for each change in a relevant figure it can be
assumed that if all other factors are constant, this is what would happen. In reality, all of the
factors are constantly shifting and enacting macroeconomic policy is very difficult to manage.
http://www.businessdictionary.com/article/1052/macroeconomics-vs-microeconomics-

A. Find the meaning of italic and underlined words and make a sentence of each!

B. What is your argument to the following statement!

1. What does GDP stand for?
2. What concepts does macroeconomics include looking at?
C. Grammar discussion

Phrase

What is a phrase? There are opinions in answering this question. One is

en.oxforddictionaries.com/grammar/phrases said, “A phrase is a small group of words that forms
a meaningful unit within a clause.”

While en.wikipedia.org/wiki/Phrase said, “In linguistic analysis, a phrase is a group of words (or
possibly a single word) that functions as a constituent in the syntax of a sentence, a single unit
within a grammatical hierarchy. “

In other words, phrase is a group of word that doesn’t consist of subject and predicate. This
group can be:

noun + noun: post office, bus station, company secretary, etc.

adjective + noun: good company, high quality, low price, etc.
adjective + noun + noun: large post office, beautiful city park, etc.
adjective + adjective + noun: tall fat boy, big famous company, cheap high quality, etc.
adverb + adjective: very cute, more interesting, very far, etc.
etc.

Make a phrase from each of the following words!

1. beautiful
2. diligent
3. secretary
4. good (barang)
5. price
6. discount
7. shop
8. company
9. demand
10. rejected

Noun + noun phrase can also be changed into noun + of + noun form. It has the same meaning.

Indonesia people – people of Indonesia

Economics book – book of economics

Put noun + noun phrase into noun + of + noun phrase form then create a sentence of each word!

1. PT. Arifjaya production

2. maintenance manager
3. purchase supervisor
4. BCA bank
 5. customers service
6. television program
7. company information
8. production department
9. delivery lorry
10. manager room

Create your own sentence!

1. Write two sentences using noun + noun phrase as the subject!

Example: The production manager is in the office.

2. Write two sentences using noun + noun phrase as the object!

Example: We meet the production manager.

3. Write two sentences using adjective + noun phrase as the subject!

Example: The beautiful secretary is taking a file.

4. Write two sentences using adjective + noun phrase as the object!

Example: I met in the office that beautiful secretary in the office.