Sunday, February 7, 2010

Scope of macro-economics.

Scope of macro-economics.
A branch of economics theory macro-economics covers the following aspects :
  1. Theory of income and employment :Macro-economics studies what factors and how these factors determine the level of income and employment. the level of income and employment is determine by aggregate demand.Aggregate demand is the sum of total consumption demand and total investment demand.Hence,consumption function and investment function are the important components of macro-economics.The theory of trade cycle is also covered by macro-economics.
  2. Theory of general prices level :Macro-economics is concerned with how general price level is determined.The main aspect of general prices level is inflation.These are many theories of inflation.Inflation,one of the grave problem of preset world,is also an important component of macro-economics.The theories of money,banking and finance also fall under macro-economics.
  3. Theory of economic growth :Growth economics or the theory of economics growth is another important branch of macro-economics.Many theories of economics growth have been developed .These theory suggest the way to accelerate the rate of growth of the economics.It is because economic growth is a prerequisites for the improvement in the levels of living of people and alleviation of poverty.
  4. Modern theory of distribution :National income is distributed among different classes of people of a country in different ways.Macro-economics studies what factors and how thees factors determine the relative share of different of people national income .M.Kaleckly and Nicholas Kaldor developed the modern theory of distribution called macro-economics theory distribution.Kalecky believed that the relative share of wages and profit depends on the degree of monopoly in the economy.Similarly,Kaldor believed that the relative share of the wages and profit depend on consumption function and the rate of investment.

2 comments:

  1. very good explanation, but should include more details

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  2. Very useful article for exam. Keep it on.

    ReplyDelete