Video:What Is Macroeconomics?with Mike Moffatt
Macroeconomics is the study of economics on a large scale, and considers the big picture of a country's economy. Here is a definition of macroeconomics.See Transcript
Transcript:What Is Macroeconomics?
Definition of MacroeconomicsMacroeconomics examines the economy as a whole. It answers questions such as:
- What causes the economy to grow over time?
- What causes short-run fluctuations in the economy?
- What influences the various economic indicators and how do those indicators affect economic performance?
One Must Understand Microeconomics to Understand MacroeconomicsMacroeconomics considers the larger picture, or how all of these decisions sum together. An understanding of microeconomics is crucial to understand macroeconomics. To understand why a change in interest rates leads to changes in real GDP, we need to understand how lower interest rates influence decisions, such as the decision of how much to save, at the firm or household level. Once we understand how an individual, on average, will change their behavior we will then understand the large scale relationships in an economy.
Like most definitions in economics, there are various competing definitions of the term Macroeconomics. According to WordReference.com, "Macroeconomics is the branch of economics concerned with aggregates, such as national income, consumption, and investment."
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