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CHAPTER ONE: INTRODUCTION TO MACROECONOMICS
DEFINITION/CONCEPT
MACROECONOMICS: BRANCH OF ECONOMICS THAT STUDIES DECISION-MAKING
FOR THE ECONOMY AS A WHOLE
BUSINESS CYCLE: SERIES OF CYCLES OF ECONOMIC EXPANSION AND
CONTRACTION.
EXPANSION: A PERIOD DURING WHICH AGGREGATE OUTPUT EXPANDS.
RECESSION: A PERIOD DURING WHICH AGGREGATE OUTPUT DECLINES.
PEAK: THE HIGHEST POINT OF A BUSINESS CYCLE, WHERE THE BUSINESS IS
PRODUCING AT FULL CAPACITY AND THE ECONOMY IS AT FULL EMPLOYMENT.
TROUGH: THE LOWEST POINT OF BUSINESS IS OPERATING BELOW CAPACITY AND
UNEMPLOYMENT IS AT HIGH LEVEL
DIFFERENCES MACRO AND MICRO
SCOPE PRODUCTION PRICE INCOME EMPLOYMENT
MICRO INDIVIDUAL & INDIVIDUAL LABOR’S INDIVIDUAL &
BUSINESSES G & S INCOME BUSINESSES
MACRO NATIONAL AGGREGATE NATIONAL ECONOMY AS
PRICE LEVEL INCOME WHOLE
MACROECONOMIC’S OBJECTIVES
CONVENTIONAL
• FULL EMPLOYMENT
• PRICE STABILITY
• ECONOMIC GROWTH
• EQUITABLE DISTRIBUTION OF INCOME
• EQUILIBRIUM IN FOREIGN SECTOR
ISLAMIC
• SOCIAL JUSTICE
• EQUITABLE DISTRIBUTION OF INCOME
• UNIVERSAL EDUCATION
• OPTIMAL RATE OF ECONOMIC GROWTH
• MAXIMIZATION OF EMPLOYMENT GENERATION
