Unit 2 – Macroeconomic Performance and Policy

You can find notes for Unit 2 here:

• Contextual Analysis

Measures of Macroeconomic Performance

• a) Economic growth
• b) Inflation
• c) Employment and unemployment
• d) Balance of payments
• e) Measures of development - Human Development Index (HDI)
• f) Other measures of development

The Circular Flow of Income

• a) The circular flow of income

Aggregate Demand (AD)

• a) Aggregate demand (AD)

Aggregate Supply (AS)

• a) Aggregate supply (AS)

The Interaction of AD and AS to Determine Equilibrium

• a) Equilibrium level of real output
• b) The multiplier

Economic Growth

• a) Economic growth

Macroeconomic Objectives and Policies

• a) Macroeconomic objectives
• b) Conflicts between objectives
• c) Macroeconomic policy instruments