Introduction to
Macroeconomics
Fatma Taskin
Fall 2015
Macroeconomics
 The study of whole economy.
 Not individual markets,
 Not individual firm or consumer,
 Not individual price level;
Macroeconomics
 The study of whole economy.
 Not individual markets,
 Not individual firm or consumer,
 Not individual price level;

Which ‘whole economy’?
Subject of Macroeconomics
 Principles that govern the workings of an economy,
ex. US economy, Turkish economy or Chinese
economy,
Subject of Macroeconomics
 Principles that govern the workings of an economy,
ex. US economy, Turkish economy or Chinese
economy,
 Sovereign Nations
Why sovereign nations?
 Among nations (internationally) commodities,
services are being sold and bought.
 Financial assets are being bought and sold,
 Capital goods (machinery) etc are exchanged.
 What is not allowed to be exchanged? Or move
internationally?
Labor...
Each sovereign nation
 has their own currency,
 has their own government, who does spending and
collect taxes,
Which macroeconomy is the best?





US?
Luxembourg?
Turkey?
China?
How do we measure economic
performance?
 Total Output Produced
Ex.
3.7 billion tons of cement,
19 million tons of wheat,
733 thousand cars...
How do we measure economic
performance?
 Total Output Produced
Ex. Ex. 3.7 billion tons of cement,
19 million tons of wheat,
733 thousand cars...
 Total value of output,
Value = price x quantity
How do we measure economic
performance?
 Total Output Produced
Ex. 3.7 billion tons, 19 million tons or 733 thousand cars...
 Total value of output,
Value = price x quantity
 Sum of all final goods and services production in a year in
one country
How do we measure economic
performance?
 Total Output Produced
Ex. 3.7 billion tons of cement, 19 million tons of wheat or 733
thousand cars...
 Total value of output,
= price x quantity=
 Sum of all final goods and services production in a year in
one country
GROSS DOMESTIC PRODUCT (GDP)
Which country has the largest GDP?
GDP 2014
trillion US dollar
World
77.3
EU
18.5
US
17.4
China
10.3
.
Canada
1.7
Turkey
0.8
Sweden
0.5
Which country has the largest GDP?
GDP 2014
Population
trillion US dollar
GDP per person
US dollar
World
77.3
EU
18.5
508,300,000
36,268
US
17.4
321,786,000
54,597
China
10.3
1,371,980,000
7,589
Canada
1.7
35,749,600
50,398
Turkey
0.8
77,695,904
10,482
Sweden
0.5
9,793,172
58,491
.
How can you increase a country’s
GDP per person?
 GDP per capita = GDP per person
 GDP per capita = GDP/population
 Ex: if GDP grows at 3 % per year and population grows
at 3 % per year what happens to the ratio?
Two facts of macroeconomics
 GDP increases almost
every year... GROWTH
 GDP increase fluctuates...
BUSINESS CYCLES
Course plan
 Course web page: ~taskin/teaching/econ 102
 You need to have a correct email:
 Lectures: Mondays and Thursdays in V02
 Recitation hours: 2 hours every week,
Requirements





1 midterm,
1 final exam,
6 homeworks, discussed in recitation hours,
6 quizzes
Participation;
FZ Conditions
 Miss more than 2 quizzes,
 If you have less than 30 % of the possible points
before the final exam.
Attendance
 Strongly recommended;
 Participation is important as much as attendance.
Attendance
 Strongly recommended;
 Participation is important as much as attendance.
 You may come in late,
 BUT do not leave while lecture is in session.
 Try to be mentally present, not just physically.