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Social Sci LibreTexts

17: Real GDP, Business Cycles, Policy and Growth

  • Page ID
    45495
  • Part 4: Real GDP, Business Cycles, Policy and Growth

    11.Inflation, real GDP, monetary policy and fiscal policy
    12.Exchange rates, monetary policy and fiscal policy
    13.Economic growth

    This Part integrates the material of the preceding chapters. Chapter 11 builds a 'modern' aggregate demand-aggregate supply model to explain the inflation rate, and real GDP and stabilization policy. The current approaches in inflation control, in which monetary policy sets the interest rate, are discussed. Chapter 12 introduces international aspects of macroeconomics and the importance of foreign exchange rates to the design and effectiveness of monetary and fiscal policy, using the model from Chapter 11. Chapter 13 introduces theories of economic growth and the importance of technology and productivity growth for standards of living.

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