ASSIGNMENT

Unit 1: Introduction to Macro Economics

1. Explain the major concerns of Macro Economics.

Following are the major concerns of macro economics -

• Aggregate Demand
• Aggregate Supply
• Saving
• Inflation/Deflation
• Economic growth
• Unemployment
• Trade Cycle
• International Trade
• Economic Planning (Fiscal policy/Monetary Policy)

2. Explain the importance of Macro Economics.

Importance of macro economics are as follows -

• It explains the working of the economy as a whole.
• It examines the aggregate behaviour of Macro Economics entities like firms,
households and the government.
• It is very useful to the planner for preparing economic plans for the country's
development.
• It is helpful in international comparison.
• Its knowledge is indispensable for the policy-makers for formulating macro-
economic policies such as monetary policy, fiscal policy, industrial policy,
exchange rate policy, income policy, etc.
• It explains economic dynamism and intricate interrelationship among
macroeconomic variable, such as price level, income, output and employment

3. Explain the Scope of Macro Economics.

 Macroeconomics has a wider scope than microeconomics. The study of macroeconomics
extends to the following areas:
 Theory of National Income;
 Theory of Employment;
 Theory of Money Supply;
 Theory of General Price Level;
 Theory of International Trade; and
 Theory of Economic Growth.