Macroeconomics For Dummies

Introduction

Macroeconomics is the study of the economy as a whole. If you want to understand key concepts that you come across every day in the news, such as inflation, unemployment, and economic growth, you’ve come to the right place.

This book helps you to tackle some of the biggest questions people ask about macroeconomics, such as these:

• What explains economic growth in the long run, and what economic policies are good for growth?
• What causes short-run business cycles and recessions and what kinds of policies might smooth these cycles out?
• What causes the price of everything to (mostly) rise and (occasionally) fall?
• Why are some people unable to find work? And what can be done to reduce unemployment?
• How is the financial system connected to the economy, and how can it lead to system-wide problems and economic recessions?

We don’t pretend to have answers to all the questions, but we do think that macroeconomics provides some good answers to many questions about how the economy works. More importantly, macroeconomics provides a good way to think about getting the answers.

Economics is one of those topics that people have strong opinions about. Just about everyone has a point of view about tax policy or the trade deficit or the banking system. And politicians and pundits top the list of those making such pronouncements. Unfortunately, a lot of these views are misguided and sometimes flat-out wrong. And that can lead to bad economic policy.

We have to confess that much of ...