Economics is the study that studies the production, distribution, and consumption of goods and services.
The branches of economics are
Other branches of economics include
Learning more about macroeconomics
Macroeconomics consists of the study on a regional, national, and global economies. It is a large-scale study of Gross Domestic Product (GDP), unemployment rates, national income, price indices, output, consumption, unemployment, inflation, saving, investment, energy, international trade, and international finance.
Macroeconomics is studied through models, concepts, and policies. There are various models, concepts, and policies.
Aggregate demand- aggregate supply- AD-AS model is a standard model that helps to study macroeconomics. It is used the same in all the textbooks. It helps to study the equilibrium of aggregate demand and aggregate supply in the economy during a given price level and level of real output.
IS-LM- IS-LM model is also known as the Hicks-Hansen model. It is a two-dimensional model that shows and studies the relationship between interest rates and asset markets.
The IS curve is a downward sloping curve, with combinations of income and interest rate where at the given interest rate, investment is equal to public and private savings, given the output.
LM curve is an upward sloping curve. The relationship between the interest rate and output is positive in the money market
Growth model- in this model, the national output is the product of two inputs that are capital and labour. This model begins with a production function.
Basic Macroeconomics Concepts
Output and income- Total amount of everything a country produces is known as national output. Income is generated when everything is produced and sold. Income generated is equal to output.
Unemployment- The number of people without jobs in the labour force who can do a job but are not able to do the job is known as unemployment.
Inflation and deflation- Increase in price across the entire economy are known as inflation. The decrease in price is known as deflation.
Monetary policy- The management of money supply and interest rates, aimed to achieve macroeconomic objectives is known as monetary policy.
Fiscal policy- Use of government revenue and expenditures as instruments to influence the economy is known as fiscal policy.
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