Macroeconomics is the study of how economies perform over short and long periods of time.
The more our economy produces, the more we can consume and the higher is our standard of living.
Similarly, if an economy produces less output this year than last year, our consumption this year will
likely be lower than last year and the number of unemployed workers will likely be higher than last year.
Macroeconomics also examines the impact that government policy can have on unemployment,
aggregate output, interest rates and the prices that we pay for the goods and services that we consume.
Among other topics, this course will examine the short-run trade-off between inflation and unemployment.
Also of importance is the time frame in which we are examining the economy's performance.
Policies that increase consumption in the short-run may reduce investment, which reduces
living standards in the long-run. So this course also emphasizes the difference between
short-run and long-run performance, highlighting the trade-offs that policymakers face.
what you will learn
This course emphasizes the difference between the short-run and long-run performance
of the economy and stresses the fiscal and monetary tradeoffs that policymakers face.
Politicians do not like to raise taxes or cut government spending.
But the US federal budget is in deficit and the US federal goverment must repay its debts from the past.
Will that require tax hikes or spending cuts? Or can the US economy grow so fast that the debt
shrinks relative to GDP?
The US Federal Reserve has "dual mandate" that requires it to maximize employment,
while also keeping prices stable and long-term interest rates moderate.
But there is usually a trade-off between inflation and unemployment in the short run,
so the US Federal Reserve must carefully balance both objectives.
The growth macro course explores these questions
in greater detail. The health macro course
applies the theory of economic growth to the study of drug addiction. It also explores
the relationship between consumer price inflation and medical price inflation.