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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
PART II Concepts and Problems in Macroeconomics
Output growth
Unemployment
Output Growth
Output Growth
Output Growth
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 government’s role
in regulating inflation and unemployment.
PART II Concepts and Problems in Macroeconomics
Macroeconomics in Literature
The underlying The Great Gatsby, set
phenomena that in the 1920s
economists study are
the stuff of novels as
well as graphs and
equations.
If you look at Figure 5.2
for these two periods,
PART II Concepts and Problems in Macroeconomics
FIGURE 5.6 Inflation Rate (Percentage Change in the GDP Deflator, Four-Quarter Average), 1970 I–2010 I
Since 1970, inflation has been high in two periods: 1973 IV–1975 IV and 1979 I–1981 IV.
Inflation between 1983 and 1992 was moderate.
Since 1992, it has been fairly low.
depression stagflation
Great Depression
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