MACROECONOMICS GROWTH

EMPIRICS

JUVIC M. LEYCO
DIVINE WORD COLLEGE OF CALAPAN
WHAT IS MACROECONOMICS?
 MACROECONOMICS

 (from the Greek prefix makro- meaning "large" and economics) is a

branch of economics dealing with the performance, structure,
behavior, and decision-making of an economy as a whole. This
includes national, regional, and global economies.

 is the study of the structure and performance of national economies

and of the policies that governments use to try to affect economic
performance.

 Income theory based on the balance of demand (consumer, business,

government) with supply of goods, stimulated by encouragement of
private expenditure and government deficit spending.

 The part of economics concerned with large-scale or general economic

factors, such as interest rates and national productivity.
 ISSUES ADRESSED BY MACROECONOMIST

 What determines a nation’s long-run economic

growth?
 What causes a nation’s economic activity to fluctuate?
 What causes unemployment?
 What causes prices to rise?
 How does being a part of a global economic system
affect nations’ economies?
 Can government policies be used to improve
economic performance?
 MACROECONOMIC POLICY

A nation’s economic performance depends on:

 natural and human resources;
 capital stock;
 technology
 economic choices made by citizens;
 macroeconomic policies of the government.
 Macroeconomists study aggregated indicators
such as:

GDP or Gross Domestic Products.

Unemployment Rate.
Price Indices.
Measures of National Income and Output.
Consumption.
 Inflation.
Savings.
Investment.
International Trade and International Finance.
 GROSS DOMESTIC PRODUCT

Is a monetary measure of the market value of all

final goods and services produced in a period
(quarterly or yearly) of time.
 Nominal GDP estimates are commonly used to
determine the economic performance of a whole
country or region, and to make international
comparisons.
UNEMPLOYMENT RATE
 UNEMPLOYMENT RATE

 Is a measure of the prevalence of unemployment

and it is calculated as a percentage by dividing the
number of unemployed individuals by all individuals
currently in the labor force. During periods
of recession, an economy usually experiences a
relatively high unemployment rate. According
to International Labour Organization report, more
than 200 million people globally or 6% of the world's
workforce were without a job in 2012.
 UNEMPLOYMENT RATE

Unemployed
Unemployme nt Rate   100%
Labour Force
PRICE INDEX
 PRICE INDEX

is a normalized average (typically a weighted average)

of price relatives for a given class of goods or services in a
given region, during a given interval of time. It is
a statistic designed to help to compare how these price
relatives, taken as a whole, differ between time periods or
geographical locations.
Price indexes have several potential uses. For particularly
broad indices, the index can be said to measure the
economy's general price level or a cost of living. More
narrow price indices can help producers with business plans
and pricing. Sometimes, they can be useful in helping to
guide investment.
 Some notable price indices include:

Consumer price index.

Producer price index.
Export price index.
Import price index.
GDP deflator.
ECONOMIC OUTPUT
 ECONOMIC OUTPUT

Is the "quantity of goods or services produced in a

given time period, by a firm, industry, or country",
whether consumed or used for further
production. The concept of national output is
essential in the field of macroeconomics. It is
national output that makes a country rich, not large
amounts of money. 
MEASURES OF NATIONAL INCOME AND OUTPUT

Gross Domestic Product

Gross National Product
Net National Income
 CONSUMPTION

 the aggregate of all economic activity that does not

entail the design, production and marketing of goods
and services (e.g. the selection, adoption, use,
disposal and recycling of goods and services).
INFLATION
 INFLATION

Inflation is the rate at which the general level of prices for

goods and services is rising and, consequently, the
purchasing power of currency is falling. Central banks
attempt to limit inflation, and avoid deflation, in order to
keep the economy running smoothly.
Inflation is a sustained increase in the general price level of
goods and services in an economy over a period of time.
When the price level rises, each unit of currency buys fewer
goods and services; consequently, inflation reflects a
reduction in the purchasing power per unit of money – a loss
of real value in the medium of exchange and unit of account
within the economy.
WEALTH
 SAVINGS/WEALTH

In economics, wealth (in a commonly

applied accounting sense, sometimes savings) is
the net worth of a person, household, or nation, that
is, the value of all assets owned net of
all liabilities owed at a point in time. For national
wealth as measured in the national accounts, the net
liabilities are those owed to the rest of the world. The
term may also be used more broadly as referring to
the productive capacity of a society or as a contrast
to poverty.  Analytical emphasis may be on its
determinants or distribution.
INVESTMENT
 INVESTMENT

Investment is the amount purchased per unit time of goods which are not
consumed at the present time. Types of investment include residential
investment in housing that will provide a flow of housing services over an
extended time, non-residential fixed investment in things such as new
machinery or factories, human capital investment in workforce education,
and inventory investment (the accumulation, intentional or unintentional,
of goods inventories).
In measures of national income and output, "gross investment"
(represented by the variable I ) is a component of gross domestic
product (GDP), given in the formula GDP = C + I + G + NX, where C is
consumption, G is government spending, and NX is net exports, given by
the difference between the exports and imports, X − M. Thus investment is
everything that remains of total expenditure after consumption,
government spending, and net exports are subtracted (i.e. I = GDP
− C − G − NX ).
 INTERNATIONAL TRADE

 Is the exchange of capital, goods,

and services across international borders or
territories. It is the exchange of goods and services
among nations of the world.  In most countries,
such trade represents a significant share of gross
domestic product (GDP). While international trade
has existed throughout history (for
example Uttarapatha, Silk Road, Amber
Road, scramble for Africa, Atlantic slave trade, salt
roads), its economic, social, and political importance
has been on the rise in recent centuries.
THANK YOU!