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1、UserSONPR:JobEFF01417:6264_ch01:Pg0:23907#/epsat100%*23907*Fri,Nov9,200111:52AMpartIIntroductionUserSONPR:JobEFF01417:6264_ch01:Pg1:21266#/epsat100%*21266*Fri,Nov9,200111:52AMCHAPTERONETheScienceofMacroeconomics1Thewholeofscienceisnothingmorethantherefinementofeverydaythinking.—AlbertEinstein1-1WhatM
2、acroeconomistsStudyWhyhavesomecountriesexperiencedrapidgrowthinincomesoverthepastcenturywhileothersstaymiredinpoverty?Whydosomecountrieshavehighratesofinflationwhileothersmaintainstableprices?Whydoallcountriesexpe-riencerecessionsanddepressions—recurrentperiodsoffallingincomesandris-ingunemployment—a
3、ndhowcangovernmentpolicyreducethefrequencyandseverityoftheseepisodes?Macroeconomics,thestudyoftheeconomyasawhole,attemptstoanswertheseandmanyrelatedquestions.Toappreciatetheimportanceofmacroeconomics,youneedonlyreadthenewspaperorlistentothenews.EverydayyoucanseeheadlinessuchasIN-COMEGROWTHSLOWS,FEDM
4、OVESTOCOMBATINFLATION,orSTOCKSFALLAMIDRECESSIONFEARS.Althoughthesemacroeconomiceventsmayseemabstract,theytouchallofourlives.Businessexecutivesforecast-ingthedemandfortheirproductsmustguesshowfastconsumers’incomeswillgrow.Seniorcitizenslivingonfixedincomeswonderhowfastpriceswillrise.Recentcollegegradu
5、ateslookingforjobshopethattheeconomywillboomandthatfirmswillbehiring.Becausethestateoftheeconomyaffectseveryone,macroeconomicissuesplayacentralroleinpoliticaldebate.Votersareawareofhowtheeconomyisdoing,andtheyknowthatgovernmentpolicycanaffecttheeconomyinpowerfulways.Asaresult,thepopularityoftheincumb
6、entpresidentriseswhentheecon-omyisdoingwellandfallswhenitisdoingpoorly.Macroeconomicissuesarealsoatthecenterofworldpolitics.Inrecentyears,Europehasmovedtowardacommoncurrency,manyAsiancountrieshaveexpe-riencedfinancialturmoilandcapitalflight,andtheUnitedStateshasfinancedlargetradedeficitsbyborrowingfroma
7、broad.Whenworldleadersmeet,thesetopicsareoftenhighontheiragendas.2
8、UserSONPR:JobEFF01417:6264_ch01:Pg2:24475#/epsat100%*24475*Fri,Nov9,200111:52AMCHAPTER1TheScienceofMacroeconomics
9、3Althoughthejobofma