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Mankiw - Macroeconomics 7e
Mankiw - Macroeconomics 7e
N. Gregory Mankiw
PowerPoint Slides by Ron Cronovich
CHAPTER
1
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SEVENTH EDITION
Why does the cost of living keep rising? Why are so many countries poor? What policies
might help them grow out of poverty?
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Great Depression
World War II
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Social problems like homelessness, domestic violence, crime, and Property crimes (right scale) poverty are linked to the economy. For example
Unemployment (left scale)
U rate
7.7%
7.1% 7.5%
inflation rate
5.8%
13.5% 4.3%
elec. outcome
Carter (D)
Reagan (R) Reagan (R)
1988
1992 1996
5.5%
7.5% 5.4%
4.1%
3.0% 3.3%
Bush I (R)
Clinton (D) Clinton (D)
2000
2004 2008
4.0%
5.5% 7.2%
3.4%
3.3% 3.8%
Bush II (R)
Bush II (R) Obama (D)
Economic models
are simplified versions of a more complex reality irrelevant details are stripped away are used to show relationships between variables explain the economys behavior devise policies to improve economic performance
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For each new model, you should keep track of its assumptions which variables are endogenous,
which are exogenous the questions it can help us understand, those it cannot
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Chapter Summary
Macroeconomics is the study of the economy
as a whole, including growth in incomes changes in the overall level of prices the unemployment rate
Chapter Summary
Economists use different models to examine
different issues.