explain each term in the above flow chart
topic: slope ofMacroeconomics
chapter : introduction to economics
need ans in paragraph...
Answers
Macro Economics:
Macro Economics is a branch of economics analysing entire economy, and dealing with total employment, national output, national income, total savings, investments, business fluctuations, etc. In short, it is the study of aggregates.
Scope of macro economics:
The scope of macro economics is mainly confined with four theories given below.
- Theory of income and employment:
It explains and includes the study of determination of, causes for, and remedies for fluctuations in level of national income and employment. It includes study of consumption function and investment function, to understand how the level of employment is determined.
- Theory of general price level and inflation:
It explains and includes the study of determination of, causes for, and remedies for fluctuations in general price level. The study of general price level is significant on account of the problems created by inflation and deflation.
- Theory of economic growth and development:
It explains and includes the study of causes of underdevelopment and poverty in poor / developing countries and strategies for accelerating their growth and development.
- Theory of macro distribution:
It explains and includes the study of, determination of relative shares of rent, wages, interest and profit in the total national income.
- Theory of business cycles:
Theory of business cycles is a part and parcel of the theory of income and employment.