Question

What are the features of 'macro economics'?

Answer 1

Macroeconomics is that branch of economics which deals with the study of national aggregates. The features of macroeconomics are:
(1) Study of Aggregates: Macro Economics deals with the study of entire economy. It studies the overall conditions in the economy, such as National Income, National Output, Total Employment, General Price Level etc.
(2) Lumping Method: Macro Economics uses the 'lumping' method for the purpose of Economic study. The approach of Macro Economics is aggregative in nature. It considers aggregates like National Income, total consumption, General aggregative price level etc., instead of personal income, per capital consumption, individual prices of commodities etc.
(3) A General Equilibrium Analysis: Macro Economics analysis is based on general equilibrium. This is because it deal with the economic system as a whole and studies the inter relationships and interdependence between the various macro variables in an economy. e.g. When aggregate demand and aggregate supply are equal. It will determine the level of income and employment.
(4) Income Analysis: Macro Economics is also known as income theory. It studies the factors determining National Income and employment and the causes of fluctuations in income and employment.
(5) Policy Oriented: The study of Macro Economics is useful in formulating economic policies to promote economic growth, to control inflation, to generate employment, to pull the economy out of depression etc. Macro Economics is a policy oriented science.
(6) Based on Interdependence: Interdependence is the core subject of Marco Economics. Everything depends on everything else. So the is an element of interdependence among the Macro - Economic variables. For examples. changes in the level of investment will finally result in changes in level of income, output, employment and economic growth.
(7) Dynamic Science: Macro economics studies the change in aggregate economic variables and analyses the dynamic nature of the economy. It helps us to study the progress of an economy in investment, total production, total employment, growth etc.