Introduction to macroeconomics
· To understand why a change in interest rates leads to changes in real GDP,
· Need to understand how lower interest rates influence decisions,
· The decision of how much to save, at the firm or household level;
· To understand how an individual, on average, will change their behavior we will then
understand the large scale relationships in an economy.
Macroeconomics can also be useful.
· The economicwell-being of all consumers, rich or poor, is affected by movements in
interest rates, exchange rates,and the rate of inflation.
· Businesses stand to gain or lose considerable amounts of money when their
economic environment changes, regardless of how well they are managed.
Macroeconomics is relevant to voters who
· wonder what their governments are up to
· can also help governments avoid the worst economic crises
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