Macro Economics
The study of economics is classified as a social science. Because economics deals with human problems. An overview of the elements that constitute in the study of economics, that is human wants, needs, scarcity, resources, goods and services, economic choice, and the laws of supply and demand. In the entire subjects, economics is the one most closely associate with everyday life
{Eg: talks about the whole forest, but not about the individual tree} Importance:-Its knowledge is indispensable for policy makers.
It is very useful to the planners for preparing economic plans for the country development.
It explains the relationship between the price levels of goods, income of the people and output (production).
Economics is sub divided into two branches called as macroeconomics and microeconomics.
MACRO ECONOMICS
Definition
- In the words of Boulding, "Macro economic theory is that part of economics which studies the overall averages and aggregates of the system."
- According to Shapiro, "Macroeconomics deals with the functioning of the economy as a whole."
- In the words of Ackley Gardner, "Macroeconomics concerns with such variables as the aggregate volume of the output of an economy, with the extent to which its resources are employed, with the size of national income and with the general price level"
Macroeconomics, on the other hand, is the field of economics that studies the behaviour of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy-wide phenomena such as Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels.
For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by unemployment rate. It perceives the overall dimensions of economy. It looks at the total size, shape and functioning of the economy as a whole. Rather than working individual parts.
{Eg: talks about the whole forest, but not about the individual tree} Importance:-Its knowledge is indispensable for policy makers.
It is very useful to the planners for preparing economic plans for the country development.
It explains the relationship between the price levels of goods, income of the people and output (production).