Meaning: -The term Macro is derived from Greek word “Makros” which means large. It is the branch of economics, which studies the behaviour of all economics units combined together. Macroeconomics is a study of aggregates. It is the study of the economic system as a whole. Therefore, it is also called as Aggregate Economics.
Definition: -“Macroeconomics deals not with individual quantities as such, but with aggregates of these quantities; not with individual incomes but with the national incomes; not with individual prices but with the price level; not with individual outputs but with the national output’. Defined by (Kenneth E. Boulding)
Features of Macro Economics
1. Study of Aggregates: - scope of Macro Economics is wide. Macroeconomics is concerned with the study of aggregates. It is concerned with concept such as Aggregate Demand, Aggregate Supply, Total Output, General Price Level, National Income, etc.
2. Lumping Method: - Macroeconomics uses lumping method for the purpose of economic study. Under lumping method we study the general price level, and not prices of individual products.
3. General Equilibrium analysis: - Macroeconomics is concerned with the behaviour of aggregates and their interdependence. It is a general equilibrium analysis in which everything depends on everything else. For instance, a change in income level may results in change in savings, which in turn may influence investment.
4. Useful for Government Policies: -The study of macroeconomics is highly useful for the formulation and implementation of economic policies of the government. The government is concerned with regulation of aggregates of the economic system such as the general price level, the general level of production, the level of employment, and so on.
5. Income Theory: - The income theory is a major aspect of macroeconomics theory. A major task of macroeconomics is the determination of national income. Macroeconomics studies the factors determining national income and the causes of the trends in national income.
6. Overall view of the economy: - the study of macroeconomics gives an overall view of the economy. It interlinks various aggregates so as to show the inter-relationships between them.it tend to provide a more realistic view of the overall economy.
