chapter 11Introduction to Macroeconomics

The first 10 chapters of this book dealt with microeconomic issues, that is, issues involving the performance of individual markets. Microeconomics seeks to answer questions like, “How much is produced and sold?,” “Is that amount efficient?,” and “Will intervention improve this outcome?” The second half of this book deals with macroeconomic issues. Macroeconomics, from the Greek root macro meaning “large,” deals with the performance of entire economies and studies issues such as economic growth, the total amount of production within an economy (usually called aggregate output), inflation, unemployment, trade, and the monetary system. The goal of a macroeconomist is to understand the mechanisms that drive ...

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