A.

LESSON PROPER

CONCEPTS AND POLICIES OF MACROECONOMICS:

National income, gross national product (GNP), unemployment, Inflation and deflation
savings, and investments are the main concepts of Macroeconomics.

            Three main types of government macroeconomic policies are as follows: 1. Fiscal

Policy 2. Monetary Policy 3. Supply-side Policies
TOPIC # 1

CONCEPTS OF MACROECONOMICS

 National Income ---- Income and Output of our economy. Total money earned

by the country.
 Gross National Product ---market value of all national products produced by
available resources of the economy.
 

 
 
 Unemployment ------- is caused by reasons that come from both the demand
side, or employer, and the supply side, or the worker.
 Inflation & deflation ------Inflation is the continuing increase in prices. When this
prices decreases, then deflation occurs.

 
 Savings the process of setting aside a portion of current income for future
use.
 Investment ------is a monetary asset purchased with the idea that the asset
will provide income in the future.
 
TOPIC # 2

MACROECONOMIC POLICIES 

The three macroeconomic policies exercised by government, also affect private sector
producers.
1. Fiscal Policy:
Refers to government / public expenditure and taxation both on national and local.
It involves changing government spending and taxation. It involves a shift in the governments
budget position. e.g. Expansionary fiscal policy involves tax cuts, higher government spending

and a bigger budget deficit.

2. Monetary Policy:
These are actions of the Central Bank to pursue objectives such as price stability and
maximum employment.
Includes changes in the money supply, the rate of interest and the exchange rate.
 Raising interest rates is usually quite effective in reducing inflationary pressures. Higher interest
rates increase the cost of borrowing and tend to slow down economic activity. rise in the rate of
interest helps implement a deflationary monetary policy. 
3. Supply-side Policies:
Policies designed to increase total supply and which it increase productive potential.
Such policies seek to increase the quantity and quality of resources and raise the efficiency of
markets
. Supply-side effects of fiscal policy
 Fiscal policy is unlikely to affect the exchange rate.
 Higher income tax or corporation tax can reduce incentives to work. 
 Cutting government spending could also harm capital investment or lead to lower
benefits and increase inequality.
 

B. QUESTIONS FOR REVIEW

                                1. What branch of the government that monitors our input & output
  2. Why is it important in studying inflation and deflation especially on prices?
  3. Explain the effect of demand and supply to unemployment.

C. OTHER REQUIRED READINGS

 Other required reading for your quizzes, research/assignments and oral recitation, you may
read any Economics book on Macroeconomics.
 Introductory to Macroeconomics – Pagoso, Dinio and Villasis

 D SECONDARY RESOURCES
To know more about this module you may explore you.tube.com on Maroeconomics
Concepts and Policies.
.
( E ) 
ASSESSMENT AND ANNOUNCEMENTS
  Please take note that our quiz on this module will be on __________. You will be assessed
through an online quiz, and random recitation in our live lecture class _______________