Macroeconomics(Sloman版本)Chap08.ppt

Aggregate demand and the national economy Macroeconomic Objectives Distinction between microeconomics and macroeconomics The major macroeconomic issues economic growth unemployment inflation balance of payments and exchange rates balance of payments deficits and surpluses exchange rate movements Q The annual rate of inflation is defined as: the difference in the price level this year compared with the same time last year. the rise in costs over the previous twelve months. the absolute increase in average prices over the previous twelve months. the percentage increase in the weighted average level of prices over the previous twelve months. the percentage expansion of the economy over the previous twelve months. Annual economic growth rate (%) UK EU-12 Japan USA Notes: 2010 and 2011 based on forecasts; EU-12 = the 12 original members of the eurozone Source: based on data in Economic Outlook (OECD, various years) Economic growth rates in selected industrialised economies UK EU-12 USA Japan Notes: . 2010 and 2011 based on forecasts; EU-12 = the 12 original members of the eurozone Source: based on data in Economic Outlook (OECD, various years) Unemployment rates inselected industrialised economies UK EU-12 Japan USA Notes: 2010 and 2011 based on forecasts; EU-12 = the 12 original members of the eurozone Source: based on data in Economic Outlook (OECD, various years) Inflation rates in selected industrialised economies The Circular Flow of Income The inner flow The circular flow of income Firms Households The Circular Flow of Income Withdrawals net saving net taxes import expenditure Injections investment government expenditure export expenditure Factor payments Consumption of domestically produced goods and services (Cd) The circular flow of income WITHDRAWALS INJECTIONS The Circular Flow of Income The relationship between injections and withdrawals the links between them Factor payments Consumption of domestically produced goods and services (Cd) The circular fl