# Macroeconomics 101 Comprehensive Notes
## Table of Contents
1. Introduction to Macroeconomics
2. Gross Domestic Product (GDP)
3. Inflation
4. Unemployment
5. Fiscal Policy
6. Monetary Policy
7. International Trade
8. Economic Growth
9. Business Cycles
10. Conclusion
## 1. Introduction to Macroeconomics
- **Definition:** Macroeconomics studies the behavior of the overall economy,
focusing on aggregate changes.
- **Key Questions:**
- What causes economic growth?
- How do inflation and unemployment interact?
## 2. Gross Domestic Product (GDP)
- **Definition:** GDP is the total value of all goods and services produced within
a country in a specific time period.
- **Components of GDP:**
- **Consumption (C):** Expenditures by households.
- **Investment (I):** Business spending on capital goods.
- **Government Spending (G):** Expenditures by the government.
- **Net Exports (NX):** Exports minus imports.
- **Real vs. Nominal GDP:** Real GDP is adjusted for inflation, while nominal GDP
is not.
## 3. Inflation
- **Definition:** Inflation is the rate at which the general level of prices for
goods and services rises.
- **Causes of Inflation:**
- Demand-pull inflation
- Cost-push inflation
- **Measurement:**
- **Consumer Price Index (CPI):** Measures the average change in prices over time
for a basket of goods and services.
- **Producer Price Index (PPI):** Measures the average change in selling prices
received by domestic producers.
## 4. Unemployment
- **Definition:** Unemployment occurs when individuals who are capable of working
are unable to find a job.
- **Types of Unemployment:**
- **Frictional:** Short-term unemployment during transitions.
- **Structural:** Mismatch between skills and job requirements.
- **Cyclical:** Resulting from economic downturns.
- **Natural Rate of Unemployment:** The long-term rate of unemployment determined
by structural forces in the labor market.
## 5. Fiscal Policy
- **Definition:** Fiscal policy involves government spending and taxation decisions
to influence the economy.
- **Tools of Fiscal Policy:**
## Table of Contents
1. Introduction to Macroeconomics
2. Gross Domestic Product (GDP)
3. Inflation
4. Unemployment
5. Fiscal Policy
6. Monetary Policy
7. International Trade
8. Economic Growth
9. Business Cycles
10. Conclusion
## 1. Introduction to Macroeconomics
- **Definition:** Macroeconomics studies the behavior of the overall economy,
focusing on aggregate changes.
- **Key Questions:**
- What causes economic growth?
- How do inflation and unemployment interact?
## 2. Gross Domestic Product (GDP)
- **Definition:** GDP is the total value of all goods and services produced within
a country in a specific time period.
- **Components of GDP:**
- **Consumption (C):** Expenditures by households.
- **Investment (I):** Business spending on capital goods.
- **Government Spending (G):** Expenditures by the government.
- **Net Exports (NX):** Exports minus imports.
- **Real vs. Nominal GDP:** Real GDP is adjusted for inflation, while nominal GDP
is not.
## 3. Inflation
- **Definition:** Inflation is the rate at which the general level of prices for
goods and services rises.
- **Causes of Inflation:**
- Demand-pull inflation
- Cost-push inflation
- **Measurement:**
- **Consumer Price Index (CPI):** Measures the average change in prices over time
for a basket of goods and services.
- **Producer Price Index (PPI):** Measures the average change in selling prices
received by domestic producers.
## 4. Unemployment
- **Definition:** Unemployment occurs when individuals who are capable of working
are unable to find a job.
- **Types of Unemployment:**
- **Frictional:** Short-term unemployment during transitions.
- **Structural:** Mismatch between skills and job requirements.
- **Cyclical:** Resulting from economic downturns.
- **Natural Rate of Unemployment:** The long-term rate of unemployment determined
by structural forces in the labor market.
## 5. Fiscal Policy
- **Definition:** Fiscal policy involves government spending and taxation decisions
to influence the economy.
- **Tools of Fiscal Policy:**
