What is the nature and scope of Macroeconomics?

<p>Macroeconomics is the branch of economics that deals with the structure, performance, behaviour, and decision-making of the whole, or aggregate, economy. John Maynard Keynes was an early 20th-century British economist, best known as the founder of Keynesian economics and the father of modern macroeconomics. The two main areas of macroeconomic research are long-term economic growth and shorter-term business cycles. It deals with the study of various topics such as national income, aggregate demand, and supply, total consumption, total investment, etc. The scope of macroeconomics includes: Giving an understanding of the functioning of the economy.&nbsp;</p>

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<p dir="ltr">Macroeconomics is the study of aggregates or averages covering the entire economy such as total employment, national income, national output, total investment, total consumption, total savings, aggregate supply, aggregate demand, and general price level, wage level and cost structure. In other words, it is aggregative economics that examines the interrelations among the various aggregates, their determination and the causes of fluctuations in them. Thus, in the words of Professor Ackley. Macroeconomics deals with economic affairs in the large, it concerns the overall dimensions of economic life. It looks at the total size shape and functioning of the elephant of economic experience, rather than working of articulation or dimensions of the individual parts. As a method of economic analysis macroeconomics is of much theoretical and practical importance. 1. To understand the workings of the economy: The study of macroeconomic variables is indispensable for understanding the workings of the economy. Our main economic problems are related to the behaviour of total income, output, employment and the general price level in the economy. These variables are statistically measurable, thereby facilitating the possibility of analyzing the effects on the functioning of the economy. As Tinbergen observes, macroeconomic concepts help in making the elimination process understandable and transparent. For instance, one may not agree on the best method of measuring different prices, but the general price level helps understand the nature of the economy. 2. In economic policies: Macroeconomics is extremely useful from the point of view of economic policy. Modern governments, especially of underdeveloped economies are confronted with innumerable national problems. They are the problems of overpopulation, inflation, balance of payments, general underproduction, etc. The main responsibility of these governments rests in the regulation and control of overpopulation, general prices, general volume of trade, general outputs, etc. Tinbergen says, working with macroeconomic concepts is a bare necessity to contribute to the solutions of the great problems of our times. No government can solve these problems in terms of individual behaviour. Let us analyse the use of macroeconomic study in the solution of certain complexes.</p><p dir="ltr">&nbsp;</p>

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