Answer :
Macroeconomics refers to the study of economic problem or economic issues at the level of an economy as a whole. In this the focus shifts from maximization of individuals gain (as in microeconomics) to maximization of social welfare. The central issues in this relate to the overall level of employment, growth rate of national output, the general price level, and stability of the economy.
The vital components of Macroeconomics are:
1. Theory related to Equilibrium level of output and Employment : It studies how equilibrium is struck when Aggregate supply (AS) = Aggregate Demand (AD).
2. Theory related to Inflationary and Deflationary Gap in the economy : It studies how departure from full employment equilibrium output causes inflationary or deflationary gap.
3. Theory of Multiplier : It analysis the process of income generation by investment expenditure in the economy.
4. Money supply and Credit Creations : It studies the components of money supply and role commercial banks in money supply through credit creation.
5. Fiscal and Monetary Policies : Budgetary and monetary measures to correct the situations of inflationary and deflationary gap.
6. Government Budget : It focuses on the measurement and impact of budgetary deficits in the economy.
7. Exchange rate and BOP : It analyses how exchange rate is determined in the international money market and how BOP impacts the level of economic activity in the domestic economy.
What is the Difference between Microeconomics and Macroeconomics
to know about this read - Difference between Microeconomics and Macroeconomics
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