Definition of Macroeconomics
Macroeconomics is the study of the structure and performance of national economies and policies that governments use to try to affect economic performance.
Macroeconomics encompasses the examination of aggregate variables in an economy such as total consumption level, autonomous investment, and government expenditure. That is, it studies all the sectors of the whole economy.
It therefore analyses the performance of the economy as a whole.
The major goals/aims of Macroeconomic Policy
- Full employment
Full employment is absence of involuntary unemployment that is where all resources in the economy are fully utilized. It is favored because the greater the level of employment, the greater the amount of goods and services available in the economy.
- Price stability
Inflation and deflation should be avoided at all costs so that prices remain stable and predictable over time. This is important because fluctuations in prices bring uncertainty and instability to the economy. Macroeconomics seeks to achieve price stability in the economy
- Economic growth
Economic growth is defined as the process whereby the real per capita income of a country increases over a long period of time.
It is measured by the increase in the amount of goods and services in each successive time period. Thus, growth occurs when an economy’s productive capacity increases which, in turn, is used to produce more goods and services.
- External balance
Economic growth is defined as the process whereby the real per capita income of a country increases over a long period of time. It is measured by the increase in the amount of goods and services in each successive time period. Thus, growth occurs when an economy’s productive capacity increases which, in turn, is used to produce more goods and services.
Thanks for reading this article. Have a fruitful day, won’t you!!!!!