Слайд 2macroeconomics
In the 1930s one of the world’s strongest economies suffered
a devastating collapse. It was the American economy, and the
disaster was the Great Depression.
In other words, governments had to have an understanding of macroeconomics.
Слайд 3There are some different aspects between microeconomics and macroeconomics. Microeconomics
looks at supply and demand for a single product or
industry, macroeconomics follows supply and demand patterns for the whole economy
Слайд 4Macroeconomics is not only about knowing what’s happening in the
economy
After the great depression governments realized that an economy
needs to be managed. They aim to have steady growth, to control inflation, and to avoid recessions.
Despite the difficulties, they have special mechanisms which help them to do this.
Слайд 5Fiscal policy
The first mechanism is fiscal policy. Fiscal policy refers
to government spending and to the tax system.
With the
help of these two mechanisms, governments can have a huge effect on the growth of the economy.
Слайд 6Monetary policy
The second of these mechanisms is monetary policy. With
its monetary policy, a government sets interest rates and also
controls the amount of money that circulates in the economy.
These interest rates have a big impact on the economy.
Слайд 7Administrative approach
The third mechanism is administrative approach. This is a
range of things that governments do to increase the supply
of goods and services to the economy but without increasing prices.
There are a number of ways governments try to do this.
Слайд 8In the end…
With the combination of these methods , governments
try to steer or guide the economy on a steady
and predictable path.
They aim for gradual economic growth and to avoid disasters like the Great Depression.