Policy issues such as Health Care and Pollution to create mastery in 3 core economic concepts; opportunity cost, supply-demand, and marginal analysis.

A look at the main macroeconomic objectives (economic growth, inflation and unemployment, government borrowing) and possible conflicts between these different macro-economic objectives.

The key pillars of macroeconomic policy are: fiscal policy, monetary policy and exchange rate policy. This brief outlines the nature of each of these policy instruments and the different ways they can help promote stable and sustainable growth.

Macroeconomics is the branch of economics that studies the economy as a whole. Macroeconomics focuses on three things: National output, unemployment, and inflation. Governments can use macroeconomic policy including monetary and fiscal policy to stabilize the economy.

Goals. In thinking about the overall health of the macroeconomy, it is useful to consider three primary goals: economic growth, full employment (or low unemployment), and stable prices (or low inflation). Economic growth ultimately determines the prevailing standard of living in a country.

Definition: Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole. It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation.

The Importance of Macroeconomics It describes how the economy as a whole functions and how the level of national income and employment is determined on the basis of aggregate demand and aggregate supply. It helps to achieve the goal of economic growth, a higher GDP level, and higher level of employment.

The major goals of microeconomic policy are efficiency, equity and growth. Economic growth is often treated as a macroeconomic issue, but it is closely related to the micro-behaviour of the economy and the functioning of markets.

The objective of microeconomic theory is to analyse how individual decision-makers, both consumers and producers, behave in a variety of economic environments.

The significance of microeconomics is discussed below: This approach of economics helps us study and understand the practical working of the economy. The entire economy is complex and complicated for a layman to analyze. However, microeconomics facilitates easy comprehension of the economic system.

Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. For example, microeconomics examines how a company could maximize its production and capacity so that it could lower prices and better compete. …

Definition: Microeconomics is the study of individuals, households and firms’ behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.

Examples of macroeconomic factors include economic outputs, unemployment rates, and inflation. These indicators of economic performance are closely monitored by governments, businesses and consumers alike.

Macroeconomics (from the Greek prefix makro- meaning “large” + economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes and government spending to regulate an economy’s growth and stability.

The main difference is that micro looks at small segments and macro looks at the whole economy. But, there are other differences. Classical economic analysis assumes that markets return to equilibrium (S=D). For a long time, it was assumed that the macro economy behaved in the same way as micro economic analysis.

6 Major Macro-Economic Issues

• Issue # 1. Employment and Unemployment:
• Issue # 2. Inflation:
• Issue # 3. The Trade Cycle:
• Issue # 4. Stagflation:
• Issue # 5. Economic Growth:
• Issue # 6. The Exchange Rate and the Balance of Payments:

Explain these three key economic ideas: People are rational, people respond to incentives, and optimal decisions are made at the margin. Economics is the study of the choices consumers, business managers, and government officials make to attain their goals, given their scarce resources.

Macroeconomics problems arise when the economy does not adequately achieve the goals of full employment, stability, and economic growth. As a result of which there is a cascading effect which follows. For instance, unemployment results from too little demand and inflation emerges with too much demand.

You encounter macroeconomics everyday through the news about the state of the macroeconomy, the price you pay for goods and services, the tax you pay on income, and the effects of macroeconomic policy on interest rates. Macroeconomic events and policies in other countries affect you as well.

10 Principles of Economics

• People Face Tradeoffs.
• The Cost of Something is What You Give Up to Get It.
• Rational People Think at the Margin.
• People Respond to Incentives.
• Trade Can Make Everyone Better Off.
• Markets Are Usually a Good Way to Organize Economic Activity.
• Governments Can Sometimes Improve Economic Outcomes.

So yes macroeconomics is extremely difficult, disgustingly complex and an almost impossible challenge, but that’s not going to stop us from trying to understand the reality we have created.

Macroeconomics helps us to understand and analyse the performance of an economy. It implies the result-oriented study of an economy—in terms of actual and factual achievements.

Types of Macroeconomic Factors

• Positive. Positive macroeconomic factors are comprised of events that ultimately stimulate economic stability and expansion within a country or a group of countries.
• Negative. Negative macroeconomic factors include events that may threaten the national or global economy.
• Neutral.

GDP, short for Gross Domestic Product, is defined as the total market value of all final goods and services produced within a country in a given period. It includes private and public consumption, private and public investment, and exports less imports.

The four components of GDP—investment spending, net exports, government spending, and consumption—don’t move in lockstep with each other.