Lecture 1

• prices go up, supply goes down

  ex. Ukraine, Russia war

• Banks dont give out credit —> demand goes down —> economy slows down

  ex. financial crisis 2008

ex. COVID 19

• services went down —> supply goes down

• people were scared of spending money —> demand goesd own

• stock market crash (high unemployment)

• After this macroeconomics was implemented (John Lenard Kayne)

  —> before the state was supposed to stay out of the market

• central belief of Keynesian economics is that government intervention can stabilize the economy

• Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending,consumption, investment, or government expenditures—> cause output to change.

  —> if goverment spending where increased, the output will increase aswell

• focused omn the states spendings and taxes

• taxes

• pension funds and bonds (money that people are saving on banks)

• tries to manage the economy ex. Unemployment

• he controlls government spendings (G)

  —> he wants to spend

• he has the ultimate descision if two people are disagreeing

• authority to establish guidelines (Richtlinienkompetenz)

the use of government spending and taxation to influence the economy

• a set of actions to control a nation's overall money supply and achieve economic growth

• ex. revisiing interest rates

• the value of finished goods and services in an economy in a year

• devoded by the amount of residents in the country

• Economic Grwoth (Wirtschaftswachstum)

•  is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year.

• Real GDP + Inflation rate

• it can increase in both prices and production over time

the nominal GDP is growing faster than the real GDP

• Population growth

• sustaines inflation

• capital investment

• Measures inflation rate

A price that has been corrected for inflation

• Real prices are uswed to compare the prices of goods over time

• the richer we become, the less economic growth we have

• Frictional Unemployment

• Cyclical Unemployment

• Structural Unemployment

• Usually short lived, it is the time between two jobs or after garduation before finfing a job

• is the variation in the numer of unemployed workers, over the course of economic upturns and downturns

• Business Cycle

• a technological change in the structure of the economy in which labor markets operate

• ex. a employee is meing exchanhes for a maschine

• the change in proce can be realted to a change in the money supply

• the quantity of money available (money supply) in the economy and the price levels have the same growth rates in the long run

• the velocity of money is a measurement of the rate at which money is exchange in an economy

• wealth is transfered from the borrower to lender

• there interest rates are based on the expected inflation rate