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Scope and Significance of Macroeconomics

Scope and Nature of Macroeconomics - Success Roar Classes

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

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