Macroeconomics

Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole, focusing on aggregate variables and economy-wide phenomena. Rather than analyzing individual markets or agents, it examines key indicators like Gross Domestic Product (GDP), unemployment rates, inflation, and interest rates to understand the forces that drive business cycles and long-run economic growth. A central focus of macroeconomics is the analysis of how governments and central banks can use fiscal and monetary policy to pursue major economic goals such as price stability, full employment, and sustainable prosperity.

1. Introduction to Macroeconomics
   1. Defining Macroeconomics
      1. Distinction from Microeconomics
         1. Focus on Aggregate Variables
         2. Differences in Methodology
         3. Scale of Analysis
      2. Scope and Core Questions
         1. Determinants of National Income
         2. Causes of Economic Growth
         3. Sources of Unemployment and Inflation
         4. Role of Government Policy
         5. International Economic Relations
   2. Key Macroeconomic Variables
      1. Gross Domestic Product
         1. Definition and Significance
         2. Measurement Methods
         3. Components and Structure
      2. Inflation Rate
         1. Definition and Measurement
         2. Importance in Economic Analysis
         3. Types of Inflation
      3. Unemployment Rate
         1. Definition and Calculation
         2. Economic Implications
         3. Labor Market Dynamics
      4. Interest Rates
         1. Nominal Interest Rates
         2. Real Interest Rates
         3. Term Structure
      5. Exchange Rates
         1. Nominal Exchange Rates
         2. Real Exchange Rates
         3. Currency Markets
   3. Brief History of Macroeconomic Thought
      1. Classical Economics
         1. Key Assumptions
         2. Say's Law
         3. Policy Implications
      2. The Keynesian Revolution
         1. Keynesian Critique of Classical Theory
         2. Emphasis on Aggregate Demand
         3. The General Theory
      3. Modern Developments
         1. Monetarism
            1. Milton Friedman's Contributions
            2. Quantity Theory Revival
         2. New Classical Economics
            1. Rational Expectations
            2. Real Business Cycle Theory
         3. New Keynesian Economics
            1. Sticky Prices and Wages
            2. Market Imperfections
         4. Behavioral Macroeconomics
            1. Psychological Factors
            2. Bounded Rationality
   4. The Circular Flow of Income and Expenditure
      1. The Two-Sector Model
         1. Households and Firms
         2. Real Flow
         3. Money Flow
      2. The Three-Sector Model
         1. Role of Government
         2. Government Expenditure
         3. Taxation
      3. The Four-Sector Model
         1. Role of Foreign Sector
         2. Exports and Imports
         3. Capital Flows
      4. Leakages and Injections
         1. Types of Leakages
         2. Types of Injections
         3. Balance Conditions
      5. Equilibrium in the Circular Flow
         1. Conditions for Equilibrium
         2. Adjustment Mechanisms