Macroeconomics Study Material with Solved Assignments and Essays

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DMS ECO2103
MACROECONOMICS
CA1 INDIVIDUAL ASSIGNMENT

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Table of contents
1.0 Chapter 1- Introduction to Macroeconomics, GDP and Economic Growth........................3
2.0 Chapter 2- Inflation and the Price Level..............................................................................3
3.0 Chapter 3- Wages and Unemployment................................................................................4
4.0 Chapter 4- Saving, Capital Formation, Financial Markets and Financial System...............4
5.0 Chapter 5- Short-term Economic Fluctuations and Aggregate Expenditure.......................5
Reference....................................................................................................................................6

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1.0 Chapter 1- Introduction to Macroeconomics, GDP and Economic Growth
1.1 Source- "Moody’s Forecasts Bigger GDP Growth for Saudi Economy, 2018
1.2 Summary- The article states that one of the most popular credit rating companies,
Moody's which evaluates the performance and economy of the different country has
increased the projected growth rate of the kingdom. As per the article, the financial
management of the government has been exceptional in the last few years. Expenditure of the
government on diversified sectors other than oil has increased its potentiality to contribute
more towards the economy. Adequate collection of revenues and the expenditure of the
government have also developed the ground for future stability and impressive performance
of the economy.
1.3 Analysis
The GDP of any country is divided into four components. These are Consumption,
Investment, Government spending and the Net export. In the case of Saudi Arabia,
government spending in the diversified sector has given the economy and opportunity to use
the multiplier effect that has the capability to increase the GDP in the next period (Mankiw,
2014). Apart from that, the component of government spending has an endogenous part
which is the tax revenue of the government. According to the article, proper collection of tax
revenue by the government justifies the claims of the forecasts done by Moody’s.
2.0 Chapter 2- Inflation and the Price Level
2.1 Source- Inflation surges to highest level in a year, 2018
2.2 Summary- This article talks about the increase in inflation in the economy of New
Zealand. According to the article, inflation of the economy has been the highest since the last
year. Along with the annual inflation, consumer price index (CPI) has also surged in the last
three months. The prices of fuel and energy have been the main contributor to the increase in
the inflation of the economy (Littleboy, Taylor & Weerapana, 2016). Apart from that, house
rents, local body rents and the value of the currency of New Zealand have also played its role
to increase the inflation of the economy.
2.3 Analysis- According to the principle of economics, inflation can be of two main types
which are demand-pull inflation and cost-push inflation. In this case of New Zealand, the