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It is a separate branch of economics came into
existence in 1936.
It was founded by JOHN MAYNARD KEYNES
in the book “The general theory of
employment, interest and money”.
It studies the relationship and interaction
between the “Factors or forces”.
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To removing the disastrous experience of
1930’s issue.
To lift the system up to the full employment
level to which automatic forces might fail to
carry it and maintain this level without
inflation.
To control aggregate demand and supply.
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To receive increasing attention of the
economists, politicians, govt, international
bodies.
Growing complexity of economic system.
Need for govt intervention with the market
system.
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Short period.
Perfect competition.
Closed economy.
Ignores the role of govt.
Diminishing marginal product.
No time lag.
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It ignores the structural changes in the
constituent elements of the aggregate.
It deals with national aggregate and
“Aggregates are not a reality but a picture or
approximation of reality”.
Some time , macroeconomics considered as an
“Intellectual attraction” without much practical
use”.
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To cash holding.
To saving and investment.
To profit and wages
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Microeconomics studies economic behaviour of
individual decision-making units.
Macroeconomics studies economic behaviour
as a whole.
Microeconomics analyses how individual firms
decides on what to produce and how to
produce.
Macroeconomics seeks to answer-(a) how(gnp
or gdp) is determined.(b) What determines the
growth rate of an economic.(c) How the general
level of price is determined in an economy.
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Finally, the real economic world is extremely
complex. In reality, an economics system looks
like a maze of chaos.Nevertheless,there is a
uniformity in the economic behaviour of the
people which is predictable with a fair degree
of accuracy.