Economics is traditionally divided into two parts: microeconomics and macroeconomics. The purpose of this course is to provide you with a fundamental understanding of the principles of macroeconomics. Macroeconomists study how a country’s economy works and try to determine the best choices to improve the overall wellbeing of a nation. Typical topics include inflation (the overall level of prices), employment, fiscal policy (government taxing and spending), and money and banking (interest rates and lending policies). Individuals and firms need to consider how macroeconomic events will affect their own prosperity. To better define macroeconomics, consider its distinction from microeconomics. Imagine you are attempting to figure out how the price of a certain good (say, bread) has been determined. Microeconomics would focus on how the supply of and the demand for bread determine its prices. It would examine factors like the input prices and the consumer’s demand in order to determine the current price for bread. Macroeconomics, on the other hand, would study the determination of prices at all levels (inflation, total output and productivity, etc.) to examine its impact on the prices of goods.
To test particular policies and ideas, or to find out the causes of good macroeconomic performance, we need to have some measure of overall economic activity. For this reason, macroeconomics uses aggregates (totals) to measure key concepts such as national income, output, unemployment, inflation, and business cycles (periodic expansions and contractions of economic activity).
By studying macroeconomics and understanding the critical ideas and tools used to measure economic data, you will have a better perspective on the issues and problems discussed in contemporary economics. This course will ask you to think critically about the national and global issues we currently face. It will also introduce the tools and principles you need to draw your own conclusions in an informed manner.