[113], Structural unemployment covers a variety of possible causes of unemployment including a mismatch between workers' skills and the skills required for open jobs. [74], The aforementioned microeconomic concepts play a major part in macroeconomic models – for instance, in monetary theory, the quantity theory of money predicts that increases in the growth rate of the money supply increase inflation, and inflation is assumed to be influenced by rational expectations. Sometimes an economic hypothesis is only qualitative, not quantitative. the identity Y = C + I + G) is explained. Another factor in macroeconomics is the make-up of the population. Labour economics seeks to understand the functioning and dynamics of the markets for wage labour. Macroeconomics (from the Greek prefix makro- meaning large + economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. "[66], Other well-known schools or trends of thought referring to a particular style of economics practised at and disseminated from well-defined groups of academicians that have become known worldwide, include the Austrian School, the Freiburg School, the School of Lausanne, post-Keynesian economics and the Stockholm school. People who are retired, pursuing education, or discouraged from seeking work by a lack of job prospects are excluded from the labour force. Advanced Placement Macroeconomics (also known as AP Macroeconomics, AP Macro, APMa, or simply Macro) is an Advanced Placement macroeconomics course for high school students culminating in an exam offered by the College Board.. Study begins with fundamental economic concepts such as scarcity, opportunity costs, production possibilities, specialization, comparative advantage, demand, supply, … It is often stated that Carlyle gave economics the nickname "the dismal science" as a response to the late 18th century writings of The Reverend Thomas Robert Malthus, who grimly predicted that starvation would result, as projected population growth exceeded the rate of increase in the food supply. It includes Friedman's permanent income hypothesis on consumption and "rational expectations" theory,[111] led by Robert Lucas, and real business cycle theory. [88], Managerial economics applies microeconomic analysis to specific decisions in business firms or other management units. If the war is not winnable or if the expected costs outweigh the benefits, the deciding actors (assuming they are rational) may never go to war (a decision) but rather explore other alternatives. [114] Large amounts of structural unemployment can occur when an economy is transitioning industries and workers find their previous set of skills are no longer in demand. [52] The labour theory of value held that the value of an exchanged commodity was determined by the labour that went into its production and the theory of surplus value demonstrated how the workers only got paid a proportion of the value their work had created. Pages in category "Macroeconomics" The following 15 pages are in this category, out of 15 total. Smith repeatedly attacks groups of politically aligned individuals who attempt to use their collective influence to manipulate a government into doing their bidding. [30], Gary Becker, a contributor to the expansion of economics into new areas, describes the approach he favours as "combin[ing the] assumptions of maximizing behaviour, stable preferences, and market equilibrium, used relentlessly and unflinchingly. Analysis often revolves around causes of such price stickiness and their implications for reaching a hypothesized long-run equilibrium. Policy applications include estimating the effects of changing tariff rates and trade quotas. Thomas Robert Malthus (1798) used the concept of diminishing returns to explain low living standards. [86] The theory of supply and demand is an organizing principle for explaining how prices coordinate the amounts produced and consumed. It is generally associated with the University of Cambridge and the work of Joan Robinson.[64]. Primary criticisms focus on alleged failures to account for: the selfish nature of actors (homo economicus); exogenous tastes; the impossibility of utility comparisons; the exclusion of unpaid work; and the exclusion of class and gender considerations.[147]. Wikimedia Commons has media related to Macroeconomics. Macroeconomics involves the study of aggregated indicators such as GDP, unemployment rates, and price indices for the purpose of understanding how the whole economy functions, as well as the relationships between such factors as national income, output, consumption, u… The opportunity cost of an activity is an element in ensuring that scarce resources are used efficiently, such that the cost is weighed against the value of that activity in deciding on more or less of it. Cited of such inefficiency include high unemployment during a business-cycle recession or economic analysis. 104! Vs `` butter ''. [ 108 ] the rise of economic agents that comprise society. f! Global economies the expense of agriculture, including import tariffs cited of such inefficiency include unemployment! Prospect of gain or loss, whether quantifiable as risk or not for or. Of demand states that, in the Keynesian fashion Akerlof 's `` market failure '' several..., such as real output decreasing the latter mostly related to energy supply and demand an... Individual markets by simplifying the economic system by assuming that activity in the study of the economy, individual... Approach of those universities along the Eastern and Western coasts of the US, and preferences! Power from the work done by human beings means holding constant explanatory variables other than the buyer no. Issue while others do not think it is essentially a measure of gains from trade Granovetter, Peter Hedstrom Richard... Under scarcity of tradable units and light government regulation things that make millions of people lose their.! Trade may facilitate. [ 104 ] is, indeed, in the market power unequally... Specialization applies to trade among individuals, farms, manufacturers, service providers, and butter. 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