What is Macroeconomics?

Macroeconomics

Macroeconomics

What is Macroeconomics? Macroeconomics is the study of economics on a large scale. The Economist’s Dictionary of Economics defines Macroeconomics as “The study of whole economic systems aggregating over the functioning of individual economic units. It is primarily concerned with variables which follow systematic and predictable paths of behavior and can be analyzed independently of the decisions of the many agents who determine their level. More specifically, it is a study of national economies and the determination of national income.”

Macroeconomics examines the economy as a whole. Things to think about when it comes to Macroeconomics are what causes the economy to grow over time, and what causes changes in the economy? These are questions that affect the economy as a whole. Macroeconomics can be best understood in contrast to microeconomics which considers the decisions made at an individual or firm level. Macroeconomics considers the larger picture. You must understand microeconomics to understand macroeconomics. Once we understand how one person, can affect the economy, we will then understand how it affect the larger scale of things.

In 2008 we all felt the economy take a huge shift; unfortunately this shift was a drastic decline versus an incline. A recession was declared, home prices fell, foreclosures rose, and unemployment soared, and some of the world’s largest financial companies had to file for bankruptcy. What happened? The United States experienced one of the largest economic plummets in history; the stock market plunged and this wiped out over $1 trillion in stock value.

Right away our political leaders took action. Government funds were provided to save large banks from defaulting. The president finalized a stimulus plan to get money to consumers in hopes of helping the economy by increasing demand for goods and services.

Unemployment is a huge factor concerning macroeconomists. We all know that unemployment hit record highs when the recession hit in 2008. For those that didn’t lose their job, unemployment still affected you and your workplace. How? You either picked up more hours, lost hours, had to take on new task due to someone else losing their job or hours at the workplace, or you may have not gotten a much deserves raise. The list of effects of the economy could go on and on, even if you didn’t lose your job.

Efraim Landa of Effi Enterprises, a leader in finance, knows firsthand how Macroeconomics can affect a country, a business, and a sole person. To sum it up, Macroeconomics deals with the economy in a larger scale, and regards larger scale problems like interest rate, inflation rate, recessions, and unemployment.

True indeed, the economy is getting better. Building the economy is a slow process, but we are seeing people buy homes again, we are seeing businesses become more innovative, and we are seeing peeks in holiday shoppers. These signs hold true that the economy is getting better, it is a process but it is definitely on the rise.

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About Efraim Landa

My name is Efraim Landa I am an entrepreneur and an expert in venture capital. I am the co founder of Effi Enterprises, a venture capital firm as well as the co founder and CEO of Gluco Vista, a company that is in the process of developing a non invasive glucose meter for those with diabetes.

Posted on November 10, 2012, in economics, Stocks, the economy and tagged , , . Bookmark the permalink. 1 Comment.

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