Overview of Macroeconomics

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Short run in Macro versus Micro
Short run in macro is a couple years or so while in micro, the short run is equal to the time where firms can’t change their amount of fixed capital.
Long run in Macro versus micro
Long run in macro is decade to decade or generation to generation, while micro is equal to the amount of time it takes for a firm to be able to enter/exit an industry or change capital(K).
Loss Aversion
Some people will over respond to a loss and become risk averse even though they we risk lovers before.
Hyperbolic Discounting
People act impulsively in the short run than they do in the long run.
a whole formed by combining many different elements.
There is no change in the amount of output produced per person over time
Economic Decline
The amount of output produced by each person is going down
Economic Growth
The amount of output produced per person is increasing over time
Standard of living
Real GDP per capita= output per person
Long Run Growth
Greater quantity and productivity of resources
total amount of various products produced
hit max before going down
hit local minimum
Time period when the economy hits a peak and then fall until it hits a trough
Begins once we hit a trough until we are recovered in which case the time after that is considered expansion
1. the economy has passed it’s previous peak
2. getting back on the trend line
Not an official economic term but when the recession is so bad that everyone gets depressed
After we have recovered we are in expansion in until we hit the next peak
out of work for 4 weeks and have looked for work for the last 4 weeks
Recession mean that their is a _____________ in unemployment
Categories: Macroeconomics