Macro economics is the study of aggregate economic behaviour of the economy as a whole.
Introduction Macro Economics
Macro economics is the study of
aggregate economic behaviour of the economy as a whole. Macro economics deals
with the output, (total volume of goods and services produced) levels of
employment and unemployment, average prices of goods and services. It also
deals with the economic growth of the country, trade relationship with other
countries and the exchange values of the currency in the international market.
The major factors influencing
these outcomes are international market forces like population growth,
consumption behaviour of the country, external forces like, natural calamities,
political instability and policy related changes such as tax policy, government
expenditure (budget) money supply and various other economic policies of the
country. Therefore it is essential to know the aggregate demand and aggregate
supply of the country.
Aggregate
demand: The total quantity of output
demanded at prevailing price levels
in a given time period, ceteris paribus.
Aggregate
supply: The total quantity of the output
the producers are willing and able
to supply at prevailing price levels in a given time period.
These two summarizes the market
activity of the economy. But the economy is disturbed by unemployment,
inflation and business cycles. Various economic policies like Fiscal policy and
monetary policy are followed by the government to achieve the equilibrium
between aggregate demand and aggregate supply.
The following chapters will help
us to understand the Macro Economic concepts, their behaviour and its impact on
the economy. Thus, an understanding of macro economics and policies is of
utmost importance to managers. Managers have to cope with the economic
environment at two levels - firm level and macro level.
Objectives Of Economic Policies:
The major macro level economic policies framed by
the government of India to achieve the objectives are:
1. To
achieve national level full employment
2. To
stabilize the price fluctuations in the market
3. To
achieve overall economic growth
4. To
develop regions economically
5. To
improve the standard of living of the people
6. To reduce
income inequalities
7. To
control monopoly market structure
8.
To avoid cyclical fluctuations in
various economic activities of the country
9. To
improve the Balance of Payment of the country and
10. To bring
social justice in various aspects.
11. Now let
us understand the various macroeconomic concepts.
Tags : Managerial Economics - Macro Economics
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