CFA Level I Macroeconomics

Presented by: Aditya Ahluwalia

www.finstructor.in

 GDP total market value of goods and

services produced in a country within a certain
time period
> Transfer payments not included
> Uses market value of goods and services
> Uses only goods produced within that period
> Intermediate goods are not included

 Sum of value added and value of final output

method

NominalandRealGDP

 Expenditure approach

 National income income received by all

factors of production that create final output

 Personal income pretax income to

households

Aggregatedemand
Consumption Marginal propensity to
consume (MPC) and Marginal propensity to
Save (MPS). MPC + MPS = 100%
Investment Int rates and profitability
Government purchases tax revenue (can be
considered independent)
Net exports relative prices of goods

IScurve

ISCurve

LMCurve

LMCurve

AggregateSupply

Shiftinaggregatedemand

Increase in consumers wealth

Business expectations
Consumer expectations
Higher capacity utilization
Expansionary monetary policy
Expansionary fiscal policy
Exchange rates
Global economic growth

ShiftinSRAS

ShiftinLRAS

Longrunequilibrium

Disequilibrium

Adjustmenttoincreaseindemand

Adjustmenttodecreaseindemand

Implicationsforanalysis
Recessionary Gap

Implicationsforanalysis
Inflationary Gap

Implicationsforanalysis
Inflationary Gap

Stagflation

1.
2.
3.
4.
5.

Labor supply
Human capital
Physical capital stock
Technology
Natural resources

ProductionFunction

BusinessCycle
Keynesian school level of optimism of those
who run businesses
New Keynesian school downward sticky
wages
Monetarist
Austrian school government intervention
New classical school changes in technology
and external shocks

EconomicIndicators

EconomicIndicator