What Is the Definition of Macroeconomics

In economics, macroeconomics is the study of how an entire economy—the market or other systems
that operate on a large scale—behaves. It is a subfield of economics that is taught in universities.
Macroeconomics is the study of economic phenomena that affect the entire economy, such as inflation,
price levels, the rate of economic growth, national income, gross domestic product (GDP), and changes
in the labor force participation rate.

What causes unemployment is one of the most important questions that macroeconomics attempts to
answer. What is the source of inflation? What factors contribute to or stimulate economic growth? The
field of macroeconomics seeks to determine how well an economy is performing, to comprehend the
forces that drive it, and to forecast how performance can be enhanced.

In contrast to microeconomics, which is more concerned with the decisions made by individual actors in
the economy, macroeconomics is concerned with the performance, structure, and behavior of the entire
economy (like people, households, industries, etc.).

IMPORTANT TAKEAWAYS

- Macroeconomics is the branch of economics that studies the structure, performance, behavior,
and decision-making of the entire economy, also known as the aggregate economy or the whole
economy.
- In macroeconomics, the two most important areas of investigation are long-term economic
growth and shorter-term business cycles.
- The modern field of macroeconomics is often defined as having originated with John Maynard
Keynes and his theories about market behavior and governmental policies in the 1930s; several
schools of thought have developed since then.
- Individual actors in the economy are the focus of microeconomics, which is different from
macroeconomics in that it is more concerned with their influences and choices (people,
companies, industries, etc.).