We have clearly covered a lot of ground over the previous chapters. To help keep things in perspective, it is worth returning to the three core concepts of macroeconomics presented in part I: output, money, and expectations. All three—as well as some of the key relationships between them—are represented graphically in figure C-1.
The macro “M”
Output, which comprises the goods and services produced in an economy, lies at the heart of macroeconomics. The amount of output a country produces ...