Question

What is macro economic

Answer 1

Macroeconomics is a branch of economics that deals with the study of aggregate factors like inflation, employment, GDP and how they influence the economy as a whole. It refers to trhe study of the behaviour of aggregate economies instead of behaviour of individuals or individual firms which are covered under Microeconomics. It studies the economy in its totality and is concerned with general economic factors. It implements the economic theory by widening its approach and looks at the 'big picture'.

The following are few examples:

• Employment
• Monetary policy
• Growth
• Efficiency
• Business Cycles
• Markets
• Price stability
• Competition
• Trade

Many of the above listed areas is also covered in Microeconomics. However, the differeence between microeconomics and macroeconomics is the level of analysis of each topic and not the topic itself.

For instance, The microeconomics study would model the "markets" in the above example from the point of view of an investor, while Macroeconomics would model them for an economy as a whole.

In another instance, we can say that the study of the problem of unemployment is a macroeconomic study as it relates to the economy as a whole.

Thus, it can be said that it is on the basis of macroeconomics that the resources of an economy and its capabilities are evaluated as a whole.