What is Economics

  1. By: ahamed bathihi

    What Is It?

    Macroeconomics is the study of the behavior of

    the economy as a whole. This is different from

    microeconomics , which concentrates more on

    individuals and how they make economic

    decisions. Needless to say, macroeconomy is

    very complicated and there are many factors

    that influence it. These factors are analyzed with

    various economic indicators that tell us about

    the overall health of the economy.

    Macroeconomists try to forecast economic

    conditions to help consumers, firms and

    governments make better decisions.

    Consumers want to know how easy it will be

    to find work, how much it will cost to buy

    goods and services in the market, or how

    much it may cost to borrow money.

    Businesses use macroeconomic analysis to

    determine whether expanding production will

    be welcomed by the market. Will consumers

    have enough money to buy the products, or

    will the products sit on shelves and collect


    Governments turn to the macroeconomy

    when budgeting spending, creating taxes,

    deciding on interest rates and making policy


    Macroeconomic analysis broadly focuses on

    three things: national output (measured by gross

    domestic product (GDP)), unemployment and

    inflation. (For background reading, see The

    Importance Of Inflation And GDP.)

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