Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

What is Macroeconomics - Essay Example

Comments (0) Cite this document
Macroeconomics is that economics that deals with the structure, performance, decision making and behavior of an economy in a bigger picture, rather than specific markets. It’s inclusive of global, regional and national economies…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.8% of users find it useful
What is Macroeconomics
Read TextPreview

Extract of sample "What is Macroeconomics"

Download file to see previous pages What is Macroeconomics?

Macroeconomics deals with the aggregate indicators like prices, unemployment rates and GDP in order to know how the entire economy works. Macroeconomists build models that clarify the connection between factors like international finance, national income, consumption, output, savings, inflation, unemployment, international trade and investment. In contrary, micro economics is basically fixated on individual agents’ action like consumers and firms and in what way do their behavior affect quantity and prices in particular markets. As macroeconomics is a wide study field, two fields of researches which are symbolic of the subject. The move to understand the consequences and causes of short run variations in a business cycle and the move to know the determinants of economic growth are some of its main objectives. Macroeconomics model and its forecast are used by large corporations and government to assist in evaluation and development of business strategy and economic policy (Dwivedi, pp.7) Macroeconomics concepts Macroeconomics comprises of variables and concepts though there are 3 core issues for macroeconomic research. Macroeconomic theory always relates inflation, unemployment and output. External to macroeconomics, the topics are extensively vital to economic agents inclusive of producers, consumers and workers. Output and income The general economic activity for the economy is briefed by an output aggregate measure. As the manufacture or services and goods output generates income. Each entire output measure relates to the measure of aggregate income. The states of America today employ the concept of aggregate output known as GDP (gross domestic product). The gross domestic product is the measure of services and goods currently produced at market prices value. An individual should note that there are many GDP measure features. To start with, only presently produced goods are encompassed. This means that when one purchases an old Tudor house aged 150 years, it does not add up to the GDP. What adds to the GDP is the service that the estate agent renders in the house purchasing process. Secondly, end products are counted. For avoidance of count, intermediate goods do not add to the GDP. For instance, steel that is used in automobile manufacture is valued as a whole. Lastly, all services and goods encompassed in GDP are assessed at market prices. Hence the prices show the prices paid by consumers at retail level inclusive of indirect taxes like sales taxes. GNP (gross national product) is a similar measure to GDP. Up to late, the government has employed GNP as the core measure of economic activity of the nation. Changes in trends always places more effect on income or output instead of prices (Blaug, pp. 108) There is a slight difference between GDP and GNP. The GDP is exclusive of income that the U.S resident and companies earn abroad. Many other income and output measures are consequent from GNP. They are inclusive of NNP (net national product), which extracts an allowance for tear and wear on equipment and plant from GNP called depreciation. Though these measures change down and up in a general same fashion, it is disposable income which is closely tied to customers demand for services and goods. It is the most outstanding aggregate demand component and entire demand for services and goods in the economy from sources. It should be noticed that the entire output or income measures deliberated above are always mentioned in real terms and nominal terms. The real terms are attuned for inflation and hence widely used as they are not distortion subject introduced by price changes. Unemployment The unemployment number in a state is measure using the rate of unemployment, workers percentage with no jobs in the labor ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“What is Macroeconomics Essay Example | Topics and Well Written Essays - 1750 words”, n.d.)
What is Macroeconomics Essay Example | Topics and Well Written Essays - 1750 words. Retrieved from
(What Is Macroeconomics Essay Example | Topics and Well Written Essays - 1750 Words)
What Is Macroeconomics Essay Example | Topics and Well Written Essays - 1750 Words.
“What Is Macroeconomics Essay Example | Topics and Well Written Essays - 1750 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF What is Macroeconomics

Macroeconomics: Production Costs

...Nasser Al Thani Microeconomics: Production Costs Fall - Econ 202 – 002 Sabo Macroeconomics: Production Costs Production is the creation of goods through transformation of inputs into finished products that satisfy consumer needs and wants. Every business organizations engaged in transformation of inputs into finished products incurs certain specific costs. Costs of producing a commodity is influenced by the cost of technology used, resources applied, as well as the costs of inputs employed in the production process. These costs are inevitable and usually included within commodity prices. The following is a discussion of production costs that business organizations incur in the process of creating goods for consumption. Introduction...
15 Pages(3750 words)Term Paper

Macroeconomics - Inflation, Disinflation and Deflation

... The report has been prepared in order to build a thorough understanding of the three important and interrelated macroeconomic concepts, i.e. inflation, disinflation, and deflation. The report will determine the causes of each of the concepts in an economic environment and several repercussions they can make into the global financial system. The academic definitions of inflation, disinflation, and deflation will strengthen the reader’s understanding before providing the complex details of each of the concepts and applications. The final section has presented conclusions and recommendations to the economists in terms of how the inflation, disinflation, as well as deflation can be controlled. Introduction The global financial crisis has...
7 Pages(1750 words)Term Paper

Quota and Tax in Macroeconomics

... This paper describes the widely used terms Quota and Tax in macroeconomics. This paper is divided into two parts and is structured in such amanner it defines the term quota and tax and its related terms along with the illustration of an example. The first part of this paper involves the analysis of import quota and conclusion on the analysis. Quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into or exported from a country in a given period of time. Quotas are used to benefit the producers of a good in a domestic economy at the expense of all consumers of the good in that economy. Critics say quotas often lead to corruption (bribes to get a quota allocation...
7 Pages(1750 words)Term Paper

Macroeconomics: Stocks and Bonds Concepts and Applications Revealed

... Macroeconomics: Stocks and Bonds Concepts and Applications Revealed Abstract The objectives of this paper are as follows: (1) it aims to present basis concepts and theories about stocks and bonds by starting with their definitions; (2) the classifications of both instruments would be discussed; and (3) the ways of investing would be explored to inform readers of each option’s considerations in investing funds. Finally, guidelines would be presented on choosing the right option for one’s financial investment. INTRODUCTION The world is beset with a crisis which is financial in nature affecting economies on a global scale. In cases of wide range financial crunch, individuals and corporations are extremely cautious... and Bonds...
8 Pages(2000 words)Research Paper

Macroeconomics and Trade Policys

Keynes argued that prices and wages do not determine the level of employment, as many classical economists suggested, but instead the level of aggregate demand for goods and services (Case & Fair 683). Keynes realized as well during the Great Depression that the government could intervene in the economy to attain specific employment and output goals by either increasing or decreasing taxes and government spending.

For example, raising taxes will decrease the disposable income of households and thus effectively decreasing consumption. When the government decreases consumption, the household demand for goods and services decreases thus it would only seem reasonable that the amount of output that the economy would also...
7 Pages(1750 words)Article

What Is Macroeconomics

While microeconomics is concerned with the factors underpinning the economic life of individual entities like families and small businesses, macroeconomics looks into the various elements that move or determine the economy in its entirety or what some call an aggregate economy. Macroeconomics is useful because it allows a predictive view of how market forces affect the economy and advises governments appropriate economic policies and gives private individuals and business entities a glimpse of what the future holds economically.
The term macroeconomics did not exist prior to the Great Depression but there was a collective set of theories that were used to study the various workings that influenced the aggregate economy. Econo...
8 Pages(2000 words)Assignment

Intermediate Macroeconomics and Macroeconomic Coordination

...CHAPTER 04 (MACROECONOMIC COORDINATION) We know that when GDP, APE & ASF are unequal, than an interplay occurs (Macroeconomic coordination process) which bridges the gap between these variables. If there is a disparity between ADF & ASF, there will be an automatic reaction among money users & suppliers which restores the magnitude of these variables to equality generally known as funding adjustment. Similarly, if there is a difference in the values of GDP & APE, it will trigger the suppliers of goods & services to act together and bring the figure close to equality. This process is called output-price adjustment. The purchasers of the domestic output can be classified into three groups. Group 1 involves individuals having sufficient money...
6 Pages(1500 words)Assignment

Macroeconomics and Analysis of Aggregate

... The paper shows the discussion regarding macroeconomics and analysis of aggregate demand and supply curves. Not only the analysis, but also the importance of aggregate demand and aggregate supply in the field of economics are discussed in the paper. A proper analysis of aggregate demand and aggregate supply is also done. Reasons for shifts in the aggregate demand and supply curves are also discussed in order to get a better understanding of aggregate demand and aggregate supply in macroeconomics. Introduction Macroeconomics is that field of study which is related to economics and deals with the working of economy of any specific country. The factors which are taken into consideration during analysis of economy include growth issues...
6 Pages(1500 words)Term Paper

Macroeconomics: Multiplier Effect

...Macroeconomics: Multiplier Effect The multiplier effect explains how a raise in some economic action initiates a chain reaction that produces more activity as compared to the actual raise. The multiplier effect reveals the impact that reserve conditions - set by the Federal Reserve - have on the US money supply. The multiplier effect is the thought that an original sum of spending leads to more expenditure costs and thus, results in a boost within state income more than the original sum of expenses. In other words, an original variation in aggregate demand creates a variation in aggregate productivity for the financial system that is a multiple of the original variation (Breisinger, Thomas & Thurlow, p. 35). Nonetheless, multiplier...
7 Pages(1750 words)Research Paper

The Macro and Fiscal Policies in Macroeconomics

...Macroeconomics Abstract This research paper explores the macro and fiscal policies that can be introduced along with government regulation policies to the current American mortgage market in order to prevent another market crash. I use three important areas, the Financial Market, the Policy sector, and bank regulations sector in pursuit of policy changes or resolutions that could help avoid future market failure or limit the exposure at most. This paper considers Canadian economic market, which is heavily regulated to find solutions to the housing market in the United States. In addition, the paper relies on publications of Turkish/American Economist Nouriel Roubini one of the few people to have predicted the 2008 financial crisis...
8 Pages(2000 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic What is Macroeconomics for FREE!

Contact Us