CHAPTER 1: INTRODUCTION TO MACROECONOMICS LEARNING OBJECTIVES I.
Goals of Part I: Introduction A. Introduce students to the main concepts in macroeconomics (Ch. 1) B. Introduce national income accounting and major economic magnitudes (Ch. 2)
II.
Goals of Chapter 1 A. Major economic issues—growth, business cycles, unemployment, inflation, the international economy, macroeconomic policy, aggregation (Sec. 1.1) B. What macroeconomists do—forecasting, analysis, research, data development (Sec. 1.2) C. Why macroeconomists disagree—Classicals vs. Keynesians, the text’s approach (Sec. 1.3)
TEACHING NOTES I.
What Macroeconomics Is About (Sec. 1.1) A. Long-run economic growth 1. Growth of real output in Canada over time 2. Sources of growth—rising population, increase in the average labour productivity
This may be a good place to introduce students to the calculation of a growth-rate, which is used throughout the textbook. You can write it first in general terms, as %∆X = [(Xt+1 – Xt)/Xt] × 100% = [(Xt+1/Xt) – 1] x 100%. Then you might use an example with something you’re talking about, such as real GDP growth over the past year, or the inflation rate. We also recommend explaining how the growth rate of a ratio is approximately the growth rate of the numerator minus that of the denominator. Throughout the text, students may come across mathematical calculations that are unfamiliar to them. The Appendix at the end of the textbook contains some helpful basic guidance to mathematical topics, including discussions of functions and graphs, slopes of functions, elasticities, functions of several variables, shifts of a curve, exponents, and growth rate formulas. B. C.
Business cycles Unemployment and Price Instability
Analytical Problem 1 asks students to think about average labour productivity and unemployment and their relationship to output.
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