Macroeconomics

Duringmy research and preparation of the portfolio project, I learnt thatthere are three factors that shape the macroeconomic of an economy.The three factors are inflation, unemployment, and stagnant economicgrowth. The inflation is the general increase in prices of goods andservices, and it depletes the value of money in circulation.Unemployment is a rate at which the people who are willing and ableto work cannot access jobs. Economic growth is the development andthe expansion of the capacity of the economy to support economicactivities. One thing I learnt that these three factors are as aresult of monetary policies and can also be solved through monetarypolicies. I would apply the knowledge that monetary policies are veryimportant in assessing the impact of every monetary decision beforeit is implemented (Harberger,Gustavus &amp Ann, 2003).

Mythought has changed in that initially I sued to think that inflationis always harmful to the economy. However, I have learnt that somerate of inflation is very important tin stimulation economic growth.This is why FED have always tried to maintain inflation and 2-3%level. I have also learnt that not all unemployment cases can besolved through monetary policies especially structural unemployment.

Inany case I would be required to complete such a project in thefuture, I would attempt to find out how these three aspects ofmacroeconomics are understood and perceived by different parties inthe economy. That is the producers, the distributors, and theconsumers.

Anystudent who is just about to start this project, it is important thathe reflects at the most famous economic policies that have everchanged the economy. For example, the “The New Deal” policies ascoined by Roosevelt and how they change the economy. The insightswould help the student have a clear picture of the macroeconomics.

References

Harberger,A.C., Gustavus, F. and Ann, M. Swift. (2003). BasicProblems In .

Retrievedfrom: http://www.econ.ucla.edu/harberger/ah-basic.pdf