Watch this with a 10-15 minute audiotrack at http://vimeo.com/novusprogram/lesson20 The lesson introduces some of the basic metrics macroeconomics uses to assess the overall efficiency of an economy, including national output, inflation, and unemployment. The second part of the lessons addresses the three main types of economic structures - free (market), command (planned), and mixed - and their basic laws that govern their behavior. The Novus project is a combination of video tutorials designed to be used in conjunction with a free business simulation software program. The Novus Business and IT Program contains 36 business and IT training videos, covering basic finance, accounting, marketing, economics, business strategy, Word, Excel, and PowerPoint. Users will have an opportunity to apply the lessons in the Novus Business Simulator. Over six rounds, the user or teams will have to make decisions on capital purchases, financing, production, financing, and human resources for a microbrewery. This channel has arranged the 36 video lessons into the order in which they are meant to be used with the simulator. To watch this slideshow as a video, please go to our Vimeo page at: https://vimeo.com/novusprogram. To download our free business simulation software, please go to our SourceForge page at: http://sourceforge.net/projects/novus/.

1. Economics: Understanding
Macroeconomic Influences and
Economic Structures
Objective: To understand the basic metrics macroeconomics uses to assess
the overall efficiency of an economy and the three main types of economic
structures - free (market), command (planned), and mixed
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2. Macroeconomics
Main economic structures:
• Free (market)
• Command (planned)
• Mixed
Main macroeconomic topics:
• Output
• Inflation
• Unemployment
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3. Economic Output
National Output = Total Value of all
Goods and Services an Economy
Produces Over a Length of Time
also known as
Gross Domestic Product (GDP)
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4. Unemployment
• Unemployment calculated the number of people
willing and capable of working, but without jobs
• Different types of unemployment:
– Classical
– Frictional
– Structural
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5. Inflation
• Inflation = Rise in prices of all goods and
services throughout an economy
• Inflation and Unemployment are inversely
related (they work in opposite directions)
• Inflation impacts all business owners
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6. Circulation of Money
$ $
The “Velocity” of money refers to how
quickly currency is exchanged between
buyers and sellers in an economy.
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7. Economic Structures
Free, or Market, Economies:
- Little to no government or other outside interference
- Buyers and sellers agree on price
- Sellers decide how much of what to produce
Command, or Planned, Economies:
- Government controls production levels of goods and
services
- Very little freedom for individuals buyers and sellers
Free /
Market Command /
Planned
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8. Mixed Economic Structures
• Contains elements of Free and Planned
economic structures
• Government intervention primarily related to:
– Environmental Controls
– Social Services or Welfare
– State Ownership of Production Facilities
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