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CHAPTER 11
MAJOR MACROECONOMIC ISSUES
Introduction
Macroeconomics studies the economy as a whole. After studying the main sectors of
the economy such as consumption, investment, government, and the foreign sector, it
becomes necessary to study the major macroeconomic problems that face all
economies. These problems affect economic stability, economic growth, living
standards, and social welfare.
This chapter focuses on the most important macroeconomic problems: unemployment,
inflation, economic recession, budget deficit, and public and external debt. Each
problem is explained in detail, including its meaning, types, causes, effects on the
economy, and the main policies used to deal with it.
Chapter Objectives
By the end of this chapter, students should be able to:
- Understand the meaning of major macroeconomic problems.
- Explain unemployment, inflation, recession, budget deficit, and public debt.
- Identify the causes and effects of each problem.
- Understand the relationship between these problems and macroeconomic
performance.
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