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Adrienne: Hi I'm Adrienne Hill, welcome back to Crash Course Economics. As you may remember from our first video, economics can be divided into two parts: microeconomics and macroeconomics. Since macroeconomics is the one that's most often in the news, that's where we're going to start. We'll get to microeconomics, which is also super important in future episodes, but what is macroeconomics again? Mr. Clifford: (monotone) It's the study of economic aggregates revealed through national income accounting, which is then- Adrienne: Okay, when you explain it like that it sounds boring, but it is not boring! Macro is about booms and busts, will you get a job when you graduate, should the government cut taxes? Mr. Clifford: In theory, lowering marginal tax rates would actually increase- Adrienne: No no no! Remember, the goal of learning economics is to become a better decision maker, and part of that is learning how the whole economy works. So let's learn about the whole economy. [Theme Music] So, macroeconomics is the study of the entire economy. Macroeconomists study the big stuff, like economic output, unemployment, inflation, interest rates, and government policies. Now when it comes to fields of study, macroeconomics is a relatively new subject. It wasn't until the Great Depression in the 1930s that economists fully appreciated the need for a systematic way to measure the overall economy, and that we might need theories to guide policies and fix potential problems. A hundred years ago there was no comprehensive data on economic activity, so there was no macroeconomics. Today, economic data is plentiful, but that doesn't mean that economists agree about where the economy is, where it's going, or what should be done to help. Macroeconomists make predictions based on data, theoretical models and historical trends, but in the end they're just predictions. If you ask three economists the same question, you're likely to get three different answers, but how, you ask, can the dismal “science” be so subjective? Well, economics is not a traditional science because it is nearly impossible to control all the different variables. Like all the social sciences, economics is studying people, and it turns out that sometimes people are unpredictable. Stan Muller: I challenge all of you to a tournament of champions in Flappy Bird! Adrienne: Who saw that coming? That doesn't mean that economics is all guesswork. For example, right now in early 2015, the economy of Greece is, well it's not, it's not good. But how can we tell, and is it going to get better? Is it going to get worse? What should be done about it? These are all questions that macroeconomists try to answer, but for this video, we're gonna focus on the question quot;How can we tell?” Mr. Clifford: Well in general, policymakers have three economic goals: they want to keep the economy growing over time, they want to limit unemployment, and they want to keep prices stable. Now for the most part when these...
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