Features of Macro Economic




Features of Macro Economics :

1) Study of Aggregates :

Macro economics deals with the study of economy as a whole. It is concerned with the aggregate concepts such as national income, national output, national employment, general price level, business cycles etc.

2) Income Theory : 

Macro economics studies the concept of national income, its different elements, methods of measurement and social accounting. Macro economics deals with aggregate demand and aggregate supply. It explains the causes of fluctuations in the national income that lead to business cycles i.e. inflation and deflation.

3) General Equilibrium Analysis :

Macro economics deals with the behaviour of large aggregates and their functional relationship. General Equilibrium deals with the behaviour of demand, supply and prices in the whole economy.

4) Interdependence :

Macro analysis takes into account interdependence between aggregate economic variables, such as income, output, employment, investments, price level etc. For example, changes in the level of investment will finally result into changes in the levels of income, levels of output, employment and eventually the level of economic growth.

5) Lumping Method :

Lumping method is the study of the whole economy rather than its part. According to Prof. Boulding, “Forest is an aggregation of trees but it does not reveal the properties of an individual tree.” This reveals the difference between micro economics and macro economics.

6) Growth Models :

Macro economics studies various factors that contribute to economic growth and development. It is useful in developing growth models. These growth models are used for studying economic development. For example, Mahalanobis growth model emphasized on basic heavy industries.

7) General Price Level :

Determination and changes in general price level are studied in macroeconomics. General price level is the average of all prices of goods and services currently being produced in the economy.

8) Policy-oriented :

According to Keynes, macro economics is a policy oriented science. It suggests suitable economic policies to promote economic growth, generate employment, control of inflation, and depression etc.

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Shaalaa.com | INTRODUCTION TO MARCO ECONOMIC Part 1 (Meaning and Features)


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