Based on participation in international trade, economies can be divided into two types the closed economy and the open economy. Here we introduce a closed economy (Introduction to the closed economy). An economy that does not participate in international trade is known as a closed economy. Thus, a closed economy refers to an economy that […]
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The performance and behavior of the economy can be shown and analyzed by different economic variables and these are known as macroeconomic variables. Thus, macroeconomic variables are indicators or pointers that exhibit the situation and trends of the entire economy or show the pattern of the economic status of a country. Macroeconomic variables are crucial
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Macroeconomics is the study of aggregates like national income, national product, total consumption, total saving, total investment, etc. The study of macroeconomics assists to realize the operation of a complicated modern economic system. It defines and describes how the economy functions and how the level of national income and employment is determined based on aggregate
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The word ‘scope’ refers to the range or area covered by anything, any subject, or any topic. Thus, considering this point the term scope of macroeconomics means the topics or issues that are covered by macroeconomics. Macroeconomics has got birth after the publication of J.M. Keynes’s General Theory of Employment, Interest, and Money in 1936.
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Macroeconomics is the part of economics that studies about the economy. The unit to deal in macroeconomics is the entire economy rather than a part of the economy. Thus, macroeconomics deals with the economic problems faced by an economy. Here we will briefly discuss the meaning and features of macroeconomics. Ahuja (2016) states that macroeconomics
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Every economy needs to invest its scarce resources in the production of capital goods and consumer goods. Both sorts of goods have their relevance. Capital goods add the capital stock and raise the economy’s productive capacity. Investing in capital goods is essential to raise the long-term production potential. Only sufficient investment in capital goods can
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Economic growth can be defined as the increase in the real national product or output over time. Economic growth during any given period is determined or expressed as dY/Y. Therefore, economic growth must mean that an ever-increasing quantity of goods and services is available to meet the needs of the economy over time. To be
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Meaning and Definition of Demand Demand for goods and services implies the number of goods and services that buyers are wanting or willing and capable to acquire at various potential prices during a particular time. In common sense, demand implies a desire or wish to have something or some goods or services. But in economics,
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The subject matter of economics is broadly divided into two branches, namely microeconomics and macroeconomics. Microeconomics and macroeconomics have become household worlds today. Microeconomic and macroeconomic analysis is now considered two important approaches to economic analysis. Microeconomics The prefix ‘micro’ is originated from the Greek word ‘mikros’, meaning small. It is the study of the
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The willingness to buy a commodity or a service for which necessary resources are available is known as demand. Both desire and resourcefulness are essential requirements for demand. An individual or a family will have demand for several things like food, house, computer, clothes, medicine, car, education, health care, entertainment, and so on to satisfy