Question

Fill in the blanks:-
1) The credit of development of macroeconomic approach must go to ________. (Dr. Marshall/ Prof. Pigou/ Lord Keynes/ Mrs. Joan Robinson)
2) _________ economics studies the problem of inflation in an economy. (Micro/ Macro/ Static/ Industrial)
3) Macroeconomics does not study _________. (whole economy/ national income/ aggregate supply/ product pricing)
4) _________ is the subject matter of Macroeconomics. (Growth theory/ Factory Pricing/ Market Structure/ Individual Incomes)
5) Micro and Macro approaches are ________. (competitive/ alternative/ substitutes/ complementary)

Answer 1

1) The credit of development of macroeconomic approach must go to Lord Keynes.

Explanation:
The need for a separate branch of economics, i.e., macroeconomics was felt inevitable during the period of The Great Depression (1929). It was then when Lord John Maynard Keynes, for the first time, used the macro approach in his book “General Theory of Employment, Interest and Money”.

2) Macroeconomics studies the problem of inflation in an economy.

Explanation:
Macroeconomics studies how the prices of goods and services in an economy are determined and what causes the change in the price level. Thus, problems concerning the price level constitute the subject matter of macroeconomics.

3) Macroeconomics does not study product pricing.

Explanation:
Macroeconomics studies an economy as a whole. It focuses on aggregate measures such as aggregate demand, aggregate supply and aggregate price level. As product pricing is an individual variable, it is not studied under macroeconomics. It is studied under microeconomics.

4) Growth theory is the subject matter of Macroeconomics.

Explanation:
Accelerating growth and development constitute the subject matter of macroeconomics. Macroeconomics analyses the reason for underdevelopment and poverty in a country. It also analyses how efficient utilisation of resources can be done. Thus, studying the problems related to growth and improving the per capita income and national income are major concerns of macroeconomics.

5) Micro and Macro approaches are complementary.

Explanation:
Micro and macro approaches are complementary. To know well about the working of an economy, one must have the knowledge of both the branches of economics. It can be said that macroeconomics uses the principles of microeconomics as its foundation and the former is a magnified version of the latter.