Unit 3: Macroeconomics
Overview
1
, Micro- and macro-economics
• In microeconomics, we studied behavior of
individual agents of economy
• In macroeconomics, we shall study behavior of
the economy as a whole. Specifically, the macro-
aggregates, their relationships and determinants
– Business cycle: short-term fluctuations in macro-
aggregates
– Economic growth: long-run changes in output and
living standards
2
, US real GDP growth rate, 1929-2008
3
Overview
1
, Micro- and macro-economics
• In microeconomics, we studied behavior of
individual agents of economy
• In macroeconomics, we shall study behavior of
the economy as a whole. Specifically, the macro-
aggregates, their relationships and determinants
– Business cycle: short-term fluctuations in macro-
aggregates
– Economic growth: long-run changes in output and
living standards
2
, US real GDP growth rate, 1929-2008
3
