Question

Do you agree with the following statements? Give reasons. 

Macro economy deals with whole economy. 

Answer 1

 We agree with the statement that macro economy deals with the whole economy. ​The word 'Macro' comes from the Greek word ‘Makros’ which means ‘large’. In terms of economics, macroeconomics is concerned about the large sections of the economy or the economy as a whole. It is that branch of economics, which deals with the economics activities by all the economic spheres, varying economic situations and economic problems for the economy as a whole. Unlike, microeconomics, macroeconomics does not study only one individual consumer or one individual producer, in fact, macroeconomics studies the behaviour, problems and economic situation of all the consumers at a time. In other words, it can be said that macroeconomics involves aggregation of all the consuming units. It studies total employment, national income, national output, aggregate demand, aggregate supply, aggregate consumption and savings and total investment. It studies the entire economy in the context of equilibrium. It studies the behaviour of a number of economic variables at a time and takes into consideration their functional relationship and interdependence. Thus, it can be concluded that macroeconomics deals with the economy as a whole.