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What Makes Macroeconomics So Important
What is macroeconomics?
Macroeconomics is the branch of economics that studies the economic principles which apply to economy as a whole. It is concerned with the structure, performance, decision making and behavior of economy as a whole instead of individual markets or individual consumers. Global economies, national economies as well as regional economies, all three are studied under the field of macroeconomics.
What does Macroeconomics deal with?
In order to understand the functioning of an economy, macroeconomists study and examine aggregate indicators like unemployment rates, GDP, price indices etc. The models developed by the macroeconomists are helpful in explaining the relationships between national income, consumption, output, inflation, unemployment, international trade, saving , investment and international finance. While microeconomics focuses on individual firms and consumers, macroeconomics is a broader field which deals with areas of research such as understanding the consequences and causes of the short run fluctuations in the national income (business Cycle) and understating the factors which determine long run economic growth. A variety of variables and concepts come under macroeconomics. Out of these, the central topics for research are inflation, output and unemployment.
Macroeconomics and it uses
The study of macroeconomics is extremely important. The models and forecasts of macroeconomics are useful for the governments as these assists in evaluating and developing the economic policies. It is necessary to have a good understanding of the principles of economics in order to make sure the economic policies are suitable and beneficial for an economy.