What is the Importance of Studying Macro Economics?
Macro Economics is aggregative economics which examines the interrelation among various aggregates, their determination and causes of fluctuations in them. The practical importance of macroeconomics has been carefully analyzed in points below.
- Various national problems like overpopulation, inflation, balance of payment are underpinning the underdeveloped economies. The study of macroeconomics helps to bring a check on these issues.
- Macroeconomics enables studying the causes, effects and solutions of general redundancy.
- The study of macroeconomics is very important for evaluating the overall performance of the economy in terms of national income. The national income data helps in anticipating the level of fiscal activity and understanding the distribution of income among different groups of people in the economy.
- Macroeconomics helps to evaluate the resources and capabilities of an economy, churn out ways to increase the national income, boost productivity, and create job opportunities to upscale an economy in terms of monetary development.
- Correct economic policies formulated at macro level makes it possible to control business cycles (inflation and deflation) and resultantly, violent booms and depressions rarely occur.
- Macroeconomics as a discipline includes diverse theories of consumption and saving. It explains the importance of saving in the national economy and its role in the investment.
- Macroeconomics studies the behavior of individual units. For instance, the reasons for increase in the cost of a firm or industry cannot be examined without evaluating or understanding the average cost conditions of the whole economy.