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Question: What Is Macroeconomics?
Answer:
What Is Macroeconomics? How I Would Define It
I would define macroeconomics similarly to how I defined it in What is Economics?. Macroeconomics examines the economy as a whole and answers questions such as 'What causes the economy to grow over time?', 'What causes short-run fluctuations in the economy?' 'What influences the values various economic indicators and how do those indicators affect economic performance?
Macroeconomics can be best understood in contrast to microeconomics which considers the decisions made at an individual or firm level. Macroeconomics considers the larger picture, or how all of these decisions sum together. An understanding of microeconomics is crucial to understand macroeconomics. To understand why a change in interest rates leads to changes in real GDP, we need to understand how lower interest rates influence decisions, such as the decision of how much to save, at the firm or household level. Once we understand how an individual, on average, will change their behavior we will then understand the large scale relationships in an economy.
Like most definitions in economics, there are various competing definitions of the term Macroeconomics. Browsing the web, we will find various answers to the question:
What is Macroeconomics? - How Others Define Macroeconomics
Perhaps the simplest answer to the question "What is Macroeconomics?" can be found at WordReference.com. They state that "Macroeconomics is the branch of economics concerned with aggregates, such as national income, consumption, and investment ".
The Economist's Dictionary of Economics defines Macroeconomics as "The study of whole economic systems aggregating over the functioning of individual economic units. It is primarily concerned with variables which follow systematic and predictable paths of behaviour and can be analysed independently of the decisions of the many agents who determine their level. More specifically, it is a study of national economies and the determination of national income."
Macroeconomics as the Economics in the Newspaper
The website Tutor2U answers the question "What is Macroeconomics" with the following response: "Macroeconomics considers the performance of the economy as a whole. Many macroeconomic issues appear in the press and on the evening news on a daily basis. When we study macroeconomics we are looking at topics such as economic growth; inflation; changes in employment and unemployment, our trade performance with other countries (i.e. the balance of payments) the relative success or failure of government economic policies and the decisions made by the Bank of England."
More on Macroeconomics
Economics at About.com has a number of useful resources on Macroeconomics:
The Macroeconomics Student Resource Center has a great deal of articles about Macroeconomic topics, such as the Business Cycle and Exchange Rates.
The page Macroeconomic Student Resources contains links to a number of high quality sites with Macroeconomics information. There's also another page of resources available at Macroeconomic Resources.
What is Macroeconomics - Where to Go From Here?
Now you know what macroeconomics is, it is time to expand your knowledge of economics. Here are 6 more entry-level FAQs to get you started:
1.What is Money?
2.What is the Business Cycle?
3.What are Opportunity Costs?
4.What does Economic Efficiency mean?
5.What is the Current Account?
6.What are Interest Rates?
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