Scope of Macro Economics :
The given chart helps us to understand the scope of macro economics.
1. Theory of Income and Employment : It explains which factors determine the level of National Income and employment and what j causes fluctuations in the level of income, output and employment. To understand how the level of employment is determined, we have to study the consumption function. It includes theory of business cycles.
2. Theory of General Price Level and Inflation : Macro economics analyses shows how the general price level is determined and the causes for fluctuations in it. This study is important for understanding the problems created by inflation and deflation.
3. Theory of Economic Growth and Development : Macro economics studies the causes of under development and poverty in poor countries and suggests strategies for accelerating growth and development in the country.
4. Macro theory of Distribution : Macro theory of distribution deals with the relative share of rent, wages, interest and profit in j the total national income of various classes.
