Why should an MBA student, study Macroeconomics ?.

Why should an MBA student, study

Macroeconomics ?

Why should an MBA student, study Macroeconomics ?

Because you need to understand the national and international economic environment that you are functioning in. You need to know:


• your suppliers


• your suppliers

• customers


• your suppliers

• customers

• competitors


• your suppliers

• customers

• competitors

• legal system


• your suppliers

• customers

• competitors

• legal system

• regulations


• your suppliers

• customers

• competitors

• legal system

• regulations

• how to interpret economic decisions made by the:


• your suppliers

• customers

• competitors

• legal system

• regulations

• how to interpret economic decisions made by the:– congress,


• your suppliers

• customers

• competitors

• legal system

• regulations


– congress, – the president, and


• your suppliers

• customers

• competitors

• legal system

• regulations


– congress,

– the president, and – the Federal reserve system


• your suppliers

• customers

• competitors

• legal system

• regulations


– congress,

– the president, and

– the Federal reserve system


• your suppliers

• customers

• competitors

• legal system

• regulations

• interpret economic decisions made by the:

– congress,

– the president, and

– the Federal reserve system

• the overall health of the economy.

What is macroeconomics ?

macroeconomics is the study of the economy as a whole.


macroeconomics is the study of the economy as a whole. It is the study of



• total output



• total output

• growth rate of the GDP



• total output


• inflation rate



• total output


• inflation rate

• unemployment rate



• total output


• inflation rate


• foreign sector



• total output


• inflation rate


• foreign sector

• exchange rate

Distinguishing Features of Macroeconomics ?

• Data is aggregated to see the big picture rather than small economic units

Distinguishing Features of Macroeconomics ?

• Data is aggregated to see the big picture rather than small economic units

• Role of money is of critical importance to understanding macroeconomics

Macroeconomic Facts: The US

1-- Output and employment have been steadily increasing throughout the history


2-- Unemployment Rate [The ratio of those who are unemployed and are interested in and are looking for gainful employment but do not have jobs to total labor force] varies for year to year. We are interested in learning:


2-- Unemployment Rate [The ratio of those who are interested in gainful employment but do not have jobs to total labor force] varies for year to year. We are interested in leaning:

– what determines the long run output and employment


• Unemployment Rate [The ratio of those who are interested in gainful employment but do not have jobs to total labor force] varies for year to year. We are interested in leaning:

– what determines the long run output and employment

– what causes year to year fluctuations in unemployment rates


3-- Money growth and Inflation seems to be very closely move together, most of the time.


4-- Balance of Trade [the difference between exports and imports] has been negative and rising. Does this mean that the rest of the world is more competitive or it has something to do with the US government budget deficits? More discussion in chapter 5.


5-- Exchange Rates [value of one currency in terms of another] have been widely fluctuating. But an index of all exchange rates show


5-- Exchange Rates [value of one currency in terms of another] have been widely fluctuating. But an index of all exchange rates show – a sharp rise in the first half of 1980s followed



– a sharp reversal in the rest of the period until



– a sharp reversal in the rest of the period until

– a rise in the mid 1990s again.

Key Economic Issues

1-- What factors influence long term growth

Key Economic Issues


2-- Why output and employment deviate from the long term trend

Key Economic Issues



3-- Role of money in affecting output, prices, and employment

Key Economic Issues




4-- What are proper role of macro policy

Key Economic Issues




4-- What are proper role of macro policy

5-- The two way relationship between interdependence (Globalization), trade and exchange rates

Why should an MBA student, study Macroeconomics ?.

Documents

Transcript of Why should an MBA student, study Macroeconomics ?.