Question

Explain the importance of Macro economics.

Answer 1

Importance of Macro Economics :

• Functioning of an Economy : It gives an idea of functioning of an economic system and help us to understand the behavioural pattern of aggregate variables.
• Economic fluctuations : It helps to analyse the causes of fluctuation in income, output and employment.
• National Income : It helps to study about National Income and makes possible to formulate correct economic policies.
• Economic Development : It helps us to understand the problems of the developing countries such as poverty, difference in the standards of living, etc., and suggest important steps to achieve economic development.
• Performance of an Economy : It helps us to analyse the performance of an economy where National Income estimates are used to measure the same.
• Study of Macro-economic Variables : Study of macro economic variables are important to understand the working of the economy.
• Level of Employment : Macro economics helps to analyse the general level of employment and output in an economy.