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Managerial Economics - Macro Economics

Introduction of Macro Economics

   Posted On :  29.05.2018 10:33 pm

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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