Chapter 22: Macroeconomics: The Big Picture
The Nature of Macroeconomics – Broadly compare macroeconomics and microeconomics.
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p. 585, problem 1. a.
b.
c.
d.
e.
f.
Macroeconomics: The Whole is Greater than the Sum of Its Parts – Describe two examples that illustrate this
point. The paradox of thrift ____________________________________________________________________
___________________________________________ an increase in the quantity of cash ____________________
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p. 585, problem 2.
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Macroeconomics: Theory and Policy – What did the economists prior to the 1930’s believe when they said they
believed in the self-regulating economy?
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How was John Maynard Keynes different from these classical economists (as we will come to call them)?
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Define monetary policy ________________________________________________________________________
Fiscal policy _________________________________________________________________________________
Problem 3. a.
b.
c.
CYU 22-1, a-g.
2, a-c
The Business Cycle – Broadly speaking, what is the business cycle? __________________________________
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Define the elements of the business cycle:
Recession:
Expansion:
Business-cycle peak:
Business-cycle trough:
How are recessions defined in the United States?
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Who gets hurt in a recession, and how?
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Taming the Business Cycle – How can recessions be mitigated (limited)?
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Problem 7. a.
c.
Long-Run Economic Growth – What is long-run economic growth? What brings it about?
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When did long-run economic growth start?
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How does a comparison of Canada and Argentina’s economic performance illustrate the importance of good
macroeconomic policy?
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CYU 22-3, 1.
2.
Problem 8.
Inflation and Deflation – What causes them? ____________________________________________________
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What troubles do they lead to?
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Why do we prefer price stability?
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