IBDP Economics Chapter 10 Notes

macroeconomic objectives i low unemployment, low and stable rate of inflation

STUDY NOTES FOR ECONOMICS CHAPTER 10 – MACROECONOMIC OBJECTIVES I LOW UNEMPLOYMENT, LOW AND STABLE RATE OF INFLATION

These notes have specially been curated by expert teachers to simplify and enlighten concepts given in IB Macroeconomic objectives I : Low Unemployment, Low and Stable rate of Inflation HL. The notes are comprehensive in nature and are sufficient to study the chapter in depth and one need not look for other resources beyond the notes provided on our website which can be accessed for free. The notes for Macroeconomic objectives I : Low Unemployment, Low and Stable rate of Inflation IBDP HL are available on our official website and can be downloaded for free. The material made available on Tychr’s website is available for all IBDP subjects and is specially curated after an extensive amount of effort to ensure that the notes are in consonance with the IB curriculum and are an amalgamation from various textbooks prescribed by the IBO.

In this chapter we are introduced to the basic concepts of macroeconomics which is the branch of economics that deals with The performance, structure and behaviour of the entire economy on a large scale that differs from microeconomics which deals with how individual economic players such as consumers and firms make decisions. First we will look at unemployment: Measurement, Consequences and types of Unemployment.

Next we study Inflation: low and stable rate of inflation, measurement of inflation and deflation, consequences of inflation, hyperinflation, types and causes of inflation ( demand pull and cost push inflation) consequences of deflation and causes of deflation. The students are also introduced to concepts of consumer price index-Cost of living of a typical household. Producer price index- measure of the price level changes from the producers point of view. Weighted price index- measure of the weight of the various goods and services according to their relative importance in consumer spending. Rate of inflation-(index of any year – index of base year) the comparison between consumer price index and GDP deflator is of utmost importance. In this chapter we also study the Phillips curve which showcases the relationship between unemployment and inflation. It is a diagrammatic concept and includes the long run Phillips curve and natural rate of unemployment. In this chapter the students should pay extra attention to the formulae and to the graphs in order to have a strong Foundation in macroeconomics.