What is the scope of Macroeconomics?

Mnemonic – National Government se poocho – kese dhunde job or kese kamaye pesa –India me Price ki maar aur International m Exchange Rate ki (Scope and Significance of Macroeconomics)

• Scope = Field or area of study
• Scope of Macroeconomics answers these 2 questions-  
  • How an economy function?
  • How can it be managed for maximum social welfare?

What is the significance/importance of Macroeconomics?

1. Detail analysis of the economy
   • National Income – Reveals nature and level of economic activity
   • Unemployment – Magnitude of the problem and the way to solve it
   • Government Budget – The way Govt. regulating the economy
2. Roadmap for Growth and Development
   • Programs and Policies of Economic Growth – Drawn by assessing the needs and means of economy
3. Economic Stability
   • Through Monetary Policy (RBI) and Fiscal Policy (Govt.)
4. Balance of Payments Status
   • Country performance in relation to rest of the world – Shows our capacity to export and compulsion to import.
5. Problems of Poverty and Environmental Pollution
   • Can be resolved using macro-models
6. Policy Formulation
   1. Can be drafted effectively on the basis of  Macroeconomic Variables like
      • aggregate demand,
      • aggregate supply,
      • total consumption and
      • investment expenditure in the economy, etc.

Scope and Significance of Macroeconomics