Macroeconomics in Today's Society - Essay Example

All these stakeholders use macroeconomics in a variety of ways to achieve different and at times conflicting purposes. In general, macroeconomics provides the rationale for a range of questions, and solutions for a number of domestic and global concerns. They include reasons for different levels of income in different countries, causes for the rise and fall in general level of prices at different periods of time in a country, explanation for the expansion and contraction of employment and production in certain period of time than others, justification for consumption and conservation, saving and investment, borrowing and lending decisions, etc (Mankiw 204).

In brief, macroeconomics provides the different stake holders with basic economic principles, instruments and various options to deal with specific economic issues. (a) Macroeconomics provides the government in a country with monetary and fiscal policy tools to control and regulate growth in incomes, employment, wages, interest rates, saving, investment, inflation, distribution of resources and produced goods and services, etc. (b) Macroeconomics offers individual firms to use their managerial skills to deal with tax rates, interest rates, etc.

, to plan their pricing policy, capita. (d) Researchers and academicians make cross country comparisons by utilizing macroeconomic situations in different countries to explain the causes and effects of a specific macroeconomic policy on the economic performance of a country, its welfare implications, and debate about the need for environmentally sound and sustainable development strategies. (e) International organizations utilize the macroeconomic variables of a country to shape a country's structural adjustment programs, and emphasize the need for fiscal prudence and balanced growth. (f) Non-governmental organizations, using the macroeconomic indicators, draw the attention of national governments, international bodies and the society at large towards unequal distribution of scare resources, and advocate the need for establishing a just society.(g) International investors base their investment decisions on the macroeconomic fundamentals of a country.

If the macroeconomic fundamentals are strong, in their perceptions, they invest and vice versa.(h) Multilateral credit agencies and financial institutions offer financial assistance to countries depending on the merit of macroeconomic performance of a country. Depending upon the degree of risk involved, they charge a premium on their credit.(i) The opposition political parties in a country pick on the ruling government by using the macroeconomic parameters, in addition to political factors.(j) Non-governmental organizations create public awareness on the macroeconomic situations, and opt for advocacy in trying to establish a new social order, guided by the principles of justice.

Macroeconomic policy tools consist of monetary and