Macroeconomics
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
According to Economypedia, “macroeconomics is the study of ‘big picture’ economics that relates to countries, regions or organisations as a whole, rather than individuals or families. It analyzes economic principles as related to unemployment, inflation, industry, and government.”
Economypedia entry on Macroeconomics
According to Economypedia, “macroeconomics is the study of ‘big picture’ economics that relates to countries, regions or organisations as a whole, rather than individuals or families. It analyzes economic principles as related to unemployment, inflation, industry, and government.”
Economypedia entry on Macroeconomics
Macroeconomis is important because nations are increasingly dependent on international trade and cross-border transactions. Macroeconmics addresses the theories and laws that drive this global commerce.
Within nations macroeconomics is key to understanding unemployment, inflation, deflation, stock markets, monetary and fiscal policy, and much more.
When a national or global financial crisis ensues, like that which began in late-2008, a good understanding of macroeconomics helps put the situation in perspective. How countries and economies deal with these shocks can be understood if you have a solid grasp on macroeconomics.
Areas macroeconomics covers:
- Money supply
- Interest rates
- Fiscal and monetary policy
- Unemployment
- Growth
- Inflation
Areas macroeconomics does not address but microeconomics covers:
- Supply and demand
- Competition
- Monopolies
- Profit and loss
- Opportunity cost
- Elasticity
- Fixed costs
- Shutdown
Contrast macroeconomics with microeconomics: Macroeconomics is the sum of all business and transactions with relation to government policy, overall growth, unemployment, and inflation while mircoeconomics studies the ways by which individuals, firms and families take decisions regarding allocation of the limited amount of resources at their disposal. The studies are done in a context of markets where goods and services are traded.