Macroeconomics deals with study of the whole economy

Macro economics

Macroeconomics word comes from Greek prefix makro- meaning large. Macroeconomics is branch of economics. Macroeconomics deals with study of the whole economy in aggregate. So when the economy is to be considered it means the economy of the world or certain country. Macroeconomics speaks of such measures as total output, total employment, total income, aggregate expenditure and the general level of prices in analyzing various economic problems. Macroeconomics approaches helps in understanding the basics of such conditions of economy and helps in improvisation of the economy. In macroeconomics we study determination of aggregate level of employment, savings and investment, economic fluctuations, foreign trade, exchange rate determination, public finance, inflation, unemployment, growth and development etc. Macroeconomics examines the sources of persistent unemployment. Macroeconomics also suggests possible remedies, such as increasing aggregate demand or reforming labor market in situations.

Macroeconomics policy has increasingly emphasized price stability as key goal. Macroeconomics can suggest the proper role of monetary and fiscal policies, of exchange rate systems, and of an independent central bank in containing inflation. All techniques or approaches of macroeconomics which study either the national income or aggregate consumption and saving etc, ultimately leads to the ascertainment of the degree of the economic growth and economic development.  All problems like inflation and deflation etc are studied and resolved through application of macroeconomics techniques. In macroeconomics the role of fiscal and monetary policies analyzed through different models, each containing its own consumption and emphasis; the determination of consumption and investment, the balance of payment and economic growth. Inflation, unemployment, budget deficit and unequal distribution of wealth all these threats can be reduced through application of macroeconomics policies like that monetary policies and fiscal policies.

The 1930s obvious the first inspiring of the science of macroeconomics, founded by john Maynard Keynes as he tried to understand the economic mechanism that produced the great depression. Macroeconomics was popularized by Keynes in contrast to the postulates of classical economist. His principal contribution, however, was his invention of a new way of looking at macroeconomics and macroeconomics policy. Before Keynes, most economist and policy maker accepted the high and lows of business cycles as being as inevitable as the tides. These long-held views left them helpless in face of the great depression the 1930s. But Keynes took an enormous intellectual leap in his 1936 book, the General Theory of Employment, Interest and Money.


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