Macroeconomics. Economic Indicators. Macroeconomics. Definition: (from the prefix macro which means “large” + economics) the branch of economic study that deals with the performance, structure and decision making of the entire economy. Regional, national, or global. Macroeconomics.
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Definition: (from the prefix macro which means “large” + economics)
the branch of economic study that deals with the performance, structure and decision making of the entire economy.
Regional, national, or global
In this model we study aggregate indicators like GDP, unemployment, and price indices to understand the economy as a whole.
Governments use macroeconomic tools to “control” the economy.
New money printed means more money in the money supply
More money = higher prices = inflation = lower value for the Canadian $
Higher minimum wage = means more spending = inflation
Also, it means less profits for companies = increased unemployment
2. The intended benefit of a higher min wage is to improve the financial position of the lowest wage earners in society. Often it leads to some of them getting laid off or fired.
Higher taxes = lower income = less inflation
Also = better schools, and social programs
More government spending = more employment = bigger GDP
Prime rate goes up = less money in the money supply = less inflation = better value for Can $
Prime rate goes down = more house and car sales = more employment = higher GDP = higher inflation = more tax revenue, and increased govnt spending.
These indicators rising = more employment = higher GDP = more tax revenue = more government spending = more inflation = lower Canadian $ = which would force government to tighten the monetary policy.
Every indicator is said to be either a “leading” indicator or a “lagging” indicator.
Leading indicators are ones that are in the direct control of the government
Lagging indicators are not directly in the control of the government.
Governments use the leading indicators to control the lagging ones.