MACROECONOMICS 102. KEY CONCEPTS

Macroeconomics now plays a large part in government and business decision-making.In Economics, What Is Macroeconomics?

Macroeconomics is the study of the behavior of an economy as a whole.

Which three major macroeconomic concerns are there?

Three major macroeconomic concerns are the unemployment level, inflation, and economic growth.

Macroeconics: Why Is It Important?

A government can assess an economy's performance and determine how to accelerate or decelerate growth with the aid of macroeconomics.

The study of macroeconomics is used to assess performance and create policies that have a positive impact on an economy. The goal of economics is to comprehend how particular events and circumstances impact employment, inflation, spending, consumption, and output.

Although economics has long been studied, it wasn't until the 1700s that the discipline began to take on its current shape.

The Cycle of Business

The levels and rates of change of important macroeconomic variables, like employment and national output, fluctuate when superimposed over long-term macroeconomic growth trends. These variations, which also happen in that order, are known as expansions, peaks, recessions, and troughs. The term "business cycle" refers to the way that these variations, when plotted on a graph, demonstrate that businesses operate in cycles.

The business cycle is measured by the National Bureau of Economic Research (NBER), which dates the cycle using GDP and Gross National Income. The NBER is also the organization that determines when recessions and expansions start and stop.

Macroeconomic Indicators

Although macroeconomics is a very broad field, this discipline is represented by two particular research areas. The first category consists of variables that impact national income increases or long-term economic growth. The other focuses on the causes and effects of the business cycle, which is a term used to describe the cyclical changes in employment and national income.

Economic Development

An economy's overall production rising is referred to as economic growth. Macroeconomists study the variables that either accelerate or impede economic growth in order to support economic policies that advance advancement and raise living standards.

Numerous indicators are available to economists for gauging economic performance. Ten categories apply to these indicators:

• Gross Domestic Product indicators: Measure how much the economy produces

• Consumer Spending indicators: Measure how much capital consumers feed back into the economy

• Income and Savings indicators: Measures how much consumers make and save

• Industry Performance indicators: Measures GDP by industry

• International Trade and Investment indicators: Indicates the balance of payments between trade partners, how much is traded, and how much is invested internationally

• Prices and Inflation indicators: Indicate fluctuations in prices paid for goods and services and changes in currency purchasing power

• Investment in Fixed Assets indicators: Indicate how much capital is tied up in fixed assets

• Employment indicators: Shows employment by industry, state, county, and other areas

• Government indicators: Shows how much the government spends and receives

• Special indicators: All other economic indicators, such as distribution of personal income, global value chains, healthcare spending, small business well-being, and more