Chapter 3: Macroeconomics

Links to individual units in chapter 3

This chapter includes the units covered in macroeconomics. The sections starts with unit 3.1 on measuring economic activity and then movies onto unit 3.2 which covers variations in economic activity - aggregate demand and supply.

The next sections look at unit 3.3 macroeconomic objectives, and then unit 3.4, economics of inequality and poverty. The final three sections are: unit 2.5 monetary policy, unit 3.6 fiscal policy and 3.7 supply side policy.

The pages have full student access to give maximum flexibility to the teacher and the student. This is a link page to sub-pages, containing each of the units for unit 3 of the new curriculum. The pages have full student access to give maximum flexibility to the teacher and the student.

Links to the following pages can be accessed at the following links:

Unit 3.1(1): Measuring the level of economic activity

Economic activity is where scarce resources are allocated to produce goods and services to satisfy human wants. Macroeconomics is the study of the economic activity from a whole economy perspective. This...

Unit 3.1(2): Measuring Economic Development

Think about how might measure economic development in a country like Brazil.Economic development can be defined as the improvement of the well-being of a country’s citizens overtime. Economic development...

Unit 3.2(1): Variations in economic activity - aggregate demand (AD)

The level of economic activity or real GDP of an economy is determined by the interaction of aggregate demand and aggregate supply for the whole economy. Changes in aggregate demand and aggregate supply...

Unit 3.2(2): Variations in economic activity - aggregate supply

Aggregate supply is the total quantity of all goods and services the economy can produce at a given price level and in a given time period. At a microeconomic level we consider the supply of a particular...

Unit 3.3(1) Macroeconomic objectives: economic growth

Economic growth is the increase in a country’s real GDP over a given time period. This is normally one year although governments release growth data quarterly so they can continuously monitor changes...

Unit 3.3(2) Macroeconomic objectives: unemployment

Unemployment is normally thought of as an economic problem that faces all countries to a greater or lesser extent. It is also a challenge to countries that constantly changes over time. During recessions...

Unit 3.3(3) Macroeconomic objectives: inflation and deflation

The overall price level or average price level of an economy is constantly changing in the economy. Managing the change in the average price of level and achieving low and stable inflation rate is a key...

Unit 3.4(1) Economics of inequality and poverty

Equality in economics is the way the economic outcomes for different people in society are the same. We often consider equality in the way the income generated by the economic activity of a country is...

Unit 3.4(2) Policies to improve equality, equity and poverty

To a greater or lesser extent all government see improving equity, reducing poverty and inequality in all its forms as a political and economic objective. Achieving lower poverty rates along with greater...

Unit 3.5 Government management of the economy – monetary policy

Governments have different economic tools they can use to target their macroeconomic objectives:The government can use a demand management or demand side approach where it affects aggregate demand in...

Unit 3.6 Government management of the economy – fiscal policy

Governments can use fiscal policy as a demand side policy to achieve its macroeconomic objectives in a similar way to its application of monetary policy. Fiscal policy involves governments using tax and...

Unit 3.7(1) Market based supply-side policies

The aims of government supply side policies are to affect aggregate supply to achieve the macroeconomic objectives. Supply side policies are often viewed as a long-term strategic set...

Unit 3.7(2) Intervensionist supply-side policies

Interventionist supply side is where the government gets more actively involved in the supply side of the economy to achieve its macroeconomic objectives. For example, diagram 4.46 shows how the application...