0
Macroeconomics
Macroeconomics addresses the economy as a whole, instead of individual markets.
330 Questions
The difference between microeconomics to macroeconomics?
Macroeconomics is the branch of Economics that deals with aggregate economic decision or behavior of an economy as a whole; for example, the problem of inflation, level of unemployment, and payment of a deficit. To put it simply, it studies the economy as a whole.
In contrast, Microeconomics is the branch of economics that studies the behavior of an individual decision-making unit such as an individual firm, their relationship with the market, at what price to set a commodity, how much of a commodity should be produced, how an individual uses their income to maximize satisfaction, and how the price of each commodity in the market is affected by the forces of supply and demand.
For example, macroeconomics deals with GDP, inflation, interest rates, and unemployment. Microeconomics deals with the economics of health care or agriculture or labor. For instance, a macroeconomist would study GDP numbers, Fed moves, the Dow Jones Industrial Average, or the Producer Price Index. A microeconomist, on the other hand, might attempt to study the economics of labor (ie: unions, labor shifts, etc).
Although "micro" means small and "macro" means large, the two shouldn't be separated by the size of an economy or firm. For example, Wal-Mart may be many times the size of the economy of a small nation; however, Wal-Mart's costs and supply/demand curves will be governed by microeconomic decisions while the GDP of the small economy is an aspect of macroeconomics.
More Information:Microeconomics is generally the study of individuals and business decisions; macroeconomics looks at higher up country and government decisions. Macroeconomics and microeconomics, and their wide array of underlying concepts, have been the subject of a great deal of writings. The field of study is vast; here is a brief summary of what each covers:
Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize it's production and capacity so it could lower prices and better compete in its industry.
Macroeconomics, on the other hand, is the field of economics that studies the behavior 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.
While these two studies of economics appear to be different, they are actually interdependent and complement one another since there are many overlapping issues between the two fields. For example, increased inflation (macro effect) would cause the price of raw materials to increase for companies and in turn affect the end product's price charged to the public.
The bottom line is that microeconomics takes a bottoms-up approach to analyzing the economy while macroeconomics takes a top-down approach. Regardless, both micro- and macroeconomics provide fundamental tools for any finance professional and should be studied together in order to fully understand how companies operate and earn revenues and thus, how an entire economy is managed and sustained.
How macroeconomic equilibrium is attained?
When the demand for goods and services is equal to the goods and services offered (supplied) by firms in the public and private sector of the economy.
Why it is important for the managers to understand macroeconomics?
Business managers need to know about macroeconomics because firms operate in and are influenced by the behavior of the overall economy. Factors such as interest rates, employment, inflation, money supply, etc., affect the business environment and financial conditions in general, so firms must address macroeconomic issues in their planning and management strategy. Macroeconomic forecasts and strategies are more important for large firms than for small businesses.
Which theory of macroeconomics dominated the Reagan adminsrtaion?
For plato users the answer is D. Which is Supply-Side Economics.
What are Functions of public sector bank?
A Public Sector bank is one in which, the Government of India holds a majority stake. It is as good as the government running the bank.
Since the public decide on who runs the government, these banks that are fully/partially owned by the government are called public sector banks.
What is the different between classic and keynesian macroeconomics?
Classical Theory: Government has minimal role in the economy, and the macro-economy is self adjusting; meaning consumers and businesses will correct any problems with the economy automatically over time. Classical theory focuses on long-term goals.
Keynesian Theory: Government has a large role in the economy, and focuses on short-term goals. Used mostly in times of recession, government spending is a good way to put money back into the GDP and in turn increase unemployment.
What does y stand for in macroeconomics?
Y often stands for GDP.
C=consumption,I=private investment,G=government spending, Y=GDP
What is the purpose of macroeconomic policy?
Macroeconomics is the study of the economy as a whole. Macroeconomic policy can be split into two branches: 1. Fiscal policy, which is the use of government spending to affect the economy. 2. Monetary policy, the process by which governments set the money supply.
When immigration adds to the size of the domestic labor pool what is likely to occur?
If the size of the labor pool increases, wages will go down.
What is Definition and scope of macroeconomics?
Macroeconomics study large economic aggregates such as national income, aggregates demand and supply etc. It is that branch of economics that studies how society uses it scarce resources to satisfy it unlimited wants. whiles micro study individual markets in the economy, example the markets for plantain macro studies the economy as a whole. whiles micro uses partial equilibrium by the uses of "ceteris paribus" to explain economic phenomenon, macro uses full equilibrium analysis.
Why is it important to solve macroeconomic problems in Indian economy?
Macroeconomic problems in India's economy can have an effect on all nations. When India has a large budget deficit it causes financial difficulties that effect all nations.
What is NNP in macroeconomics?
Net national product (NNP) is the total market value of all final goods and services produced by residents in a country or other policy during a given period (gross national product or GNP) minus depreciation. Depreciation (also known as consumption of fixed capital) measures the amount of GNP that must be spent on new capital goods to maintain the existing physical capital stock.
NNP is the amount of goods in a given year which can be consumed without reducing future consumption. Setting part of NNP aside for investment permits capital stock growth (see economic growth and capital formation), and greater future consumption.
Which is the worse macroeconomic problem for t economy higher inflation or higher unemployment?
Inflation is worse than recession. Recessions end. Inflation is the most powerful force in the world and it keeps on keeping on. Inflation in the U.S., for example, has decreased the value of the dollar 84% since the beginning of 1969. The average rate of inflation in the U.S. is 4.1% on average for the past 30 years; at this rate the dollar loses half its purchasing power every 17 years. For detailed inflation data, see www.bls.gov. The data there includes an inflation chart sine 1913. Since the mid 1970s, the slope of the chart is up on an angle of approximately 45 degrees.
Which of the following areas concerns macroeconomics?
We need more details in your question in order to provide you an answer.
What are the major macro economics issues ehich makes the subject matter of macroeconomics?
The Major Macroeconomic Issues are:
- Economic growth and standard of living
A growing economy means that there will be more goods and services for people to consume.while standard of living is the degree to which people have access to goods and services that make their life easier, healthier, safer, and more enjoyable.
- Unemployment
refers to a situation where a group of people who would like to work or to be employed but can not find work or a job. Macroeconomics study the causes of unemployment and the reasons to why it differs across countries.
- Inflation
inflation refers to a general raise in crises throughout the economy. macroeconomic is concerned to what cause inflation? what is the relationship between inflation and other macroeconomic objectives. keeping prices under control is a major macro economics issue.
- Balance of payment and exchange rates
balance of payment refers to the record of a country's financial transactions between the residents of the country and the rest of the world. exchange rate is the value of one currency for the purpose of conversion to another. macroeconomics studies the related issues in balance of payment and the exchange rate, for example it asks questions such as what causes balance of payment problems? and how does the balance of payment and the exchange rate relates to other macroeconomics issues? and what are the best polices for the government to adopt.
- Recession and expansions
Economy experience periods of slow growth that is Recession and more rapid growth that is Expansions. Macroeconomic examines the sources of these periods and the government polices that attempt to moderate them.
How Fiscal and Monetary Policy can be used to address macroeconomic problem?
The Federal Reserve, or "Fed", can use monetary policy to influence the economy through the use of three tools, the most widely used being the use of open market operations, in which it buys or sells government securities. The more they buy from banks, the more money the banks will have, and the more loans they will be able to give out. If they sell securities to banks, the banks will have less money, and be less able to loan money, which would slow economic activity and decrease inflation in that now businesses and individuals will have less to spend, which would cause a downward shift in demand for goods and services. The Fed also uses its power to change what is known as the discount rate, or the rate of interest on money that banks have to pay back after borrowing from the Fed. This isn't used often, but can influence the bank's ability to loan money to businesses and individuals, which would affect economic activity and growth. The third tool it uses is known as the Reserve Requirement, and is a powerful tool at the Fed's disposal. This is the percentage of money banks are required to keep in reserve from deposits by account holders. The higher it is, the less money is available for lending, and the lower it is, the more money is available for lending. Monetary Policy, in a nutshell, is the use of tools by the Fed to influence the money supply to the public, and either encourage or discourage economic growth of the country as a whole.
Fiscal Policy is completely under governmental control, and uses two methods, taxation and government spending, to encourage healthy economic growth. Government spending lets more money flow through the system, and encourages growth, just as taxation does the opposite. It is based off of the economic theories of John Maynard Keynes, who first proposed that the economy hinged on the spending of individuals, businesses, and, most importantly to fiscal policy, government. The government uses its spending power to influence economic growth.
good luck in economics, by the way :P
How is macroeconomics similar to microeconomics?
Macro economics as a subject studies the domains of social institutions / state in terms of resources utility and levels of income by the dual forces of supply and demand both in the micro and Marco level of its operation.However in methodology it is science as it analyses by universal parameters to determine the various levels both as discrete and probability units.
What are macroeconomic goals that economic systems try to achieve?
1. Economic Growth
2. Economic Development
3. Price Stability
4. Full Employment
5. External Equilibrium
Cheers..
