Macroeconomics Assignment Help


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Macroeconomics Assignment Help

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Macroeconomics is defined as the branch economics that deals with studying the behavior, structure, decision-making and performance of an entire economy. It delves into the behavior of a market or other systems operating on a large scale, further analyzing how each different sector of the economy is related to one another. Macroeconomics perceives the overall, big picture scenario of an economy.

It determines all the broad aggregates in an economy, including the national output, price levels, inflation, unemployment, rate of economic growth, gross domestic product and the position of balance of payments. Macroeconomics tends to identify the problems, principles and policies concerning expanding the production capacity and achieving full employment.


The goal of macroeconomics is to achieve stable economic growth and maximize the standard of living and level of national income. The goals of macroeconomics are supplemented by various secondary objectives as discussed below:

Increasing Sustainability: The increase in the GDP of a country can enhance the sustainability of a nation by minimizing inflation and the environmental impact resulting from growth.

Maximizing Productivity: Increasing a nations productivity is directly linked to the improvement of global trade performance and competitiveness.

Price Stability: Price stability will improve the standards of living of a country by cutting out poverty.

Full Employment: The ultimate objective of the government is to increase employment leading to a situation where every individual is able to find a job easily.

Controlling Inflation: The target of the government of a country is to keep the inflation of the consumer price index by 2%.

Macroeconomists makes an attempt to fulfil all these objectives to resolve some of the significant concerns related to unemployment, inflation and economic growth by measuring the performance of an economy. They also try to identify the forces acting behind the economy that might improve financial performance. They try to understand the relationship between various economic indicators by employing several robust and advanced models.


Economic Indicators affect the macroeconomy of a nation by playing a vital role in assessing various aspects of performance. Major economic indicators include:

Gross Domestic Product (GDP): GDP reflects the monetary value of all services and goods produced by a nation. GDP represents the size of the economy at several points in time. GDP is generally calculated and released on a quarterly or annual basis by the governments. The economic growth pattern of a country can be determined by comparing the GDP of several years. GDP is also used to compare two economies. GDP is directly related to several other indicators, including employment rates. Consistent GDP indicates that a country is economically stable, a decline in GDP rate indicates economic recession, whereas a rapidly growing GDP also brings certain de-merits. Programs such as excessive spending by a government and quantitative easing are used to manipulate the GDP figures efficiently.

Inflation: Inflation is referred to as the increase in the overall price of commodities, resulting in the decrease of the purchasing power of the consumers. Inflation generally takes place when the demand for a product or service increases. A hike in inflation is generally noticed during periods of economic growth. An increase in inflation rates can affect the price of the currency of a country, making it more expensive for the customers. Inflation rates are inversely proportional to employment and GDP growth, whereas it is directly proportional to the interest rates. Inflation rates generally decrease during the economic downturn, indicating that the overall spending of a country has reduced.

Unemployment: Unemployment counts the group of people who do not have any job and are seeking one. Retired or disabled individuals are not part of the unemployed whole. Unemployment cannot be ignored or eliminated as it is a natural phenomenon. Employment tends to be a direct indicator of economic output. It is the most useful economic indicator, as an increase in unemployment rates indicates a decrease in the overall economy of a nation.

Interest Rates: Interest rates take into account the return a borrower has to pay while lending any commodity. The interest rates are generally set by the central bank. Interest rates influence economic activity as it influences the decisions of a consumer. High-interest rates are inversely proportional to spending since they need to pay a higher sum for their borrowed amount.

Production & Manufacturing statistics: The country's economy can be easily identified by the production and manufacturing statistics. An increase in production and manufacturing index indicates a steady increase in consumption which in turn increases the GDP and overall economic growth of a country. Production level is also directly related to employment, as the production will increase, so the company will require a higher number of employees to meet the demands.

Consumer Price Index (CPI): Consumer Price Index is used to measure the variation in the cost of service and goods for a specific month. CPI can be used to identify the inflation rates as it compares the cost of living for a period of time.


Macroeconomic models are forecasts that help the government by evaluating the monetary, economic and fiscal policies.

Macroeconomics enables various business organizations to devise strategies in global as well as domestic markets.

Macroeconomics aids in the planning and prediction of asset movements, hence helping the investors.

Applying macroeconomics properly can also offer several insights on the functioning of economies as well as the consequences of decisions and policies.

Macroeconomics also assists individual business groups and investors to make proper and informed decisions by providing them with a thorough understanding of the implications of broad economic policies and trends.


Long-term economic growth and short term business cycle form the two major research areas of macroeconomics.

Economic Growth: The uptake in the aggregate production of an economy is referred to as economic growth. Macroeconomists make an attempt to understand the various factors that might either promote or retard the growth of an economy. They employ several macroeconomic theories to assist the economic policies that are in favor of the progress, development and living standards.

Business Cycle: Rates of change and levels of significant macroeconomic variables, including the national output and employment, undergo occasional fluctuations, being superimposed over the macroeconomic growth trends of the decade.

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    How is the macroeconomy influenced by the government?

    Monetary policy is an action which the central banks implement that influences the interest rates and money supply. Interest-rate targets are set by the central bank for direct results. Interest rates are also affected by money supply, where increased supply further lowers the interest rates. Two types of monetary policies are set by the government:

    Expansionary Monetary Policy: The government of any country implements expansionary monetary policy in order to encourage the growth of an economy during an economic slump. Securities are bought from the open market, and reserve requirements are eased to enhance the money supply along with reducing the interest rates.

    Contractionary Monetary Policy: To counter the trouble of reducing purchase power caused by high inflation rates during the economic booms, the government tends to reduce the money supply and enhance the interest rates. The rates of interest are increased by selling securities to the open market, increasing the interest rate target and tightening the reserve requirements. Macroeconomics can be basically applied to a developed, capitalist economy. In a capitalist economy, productive assets are either owned directly by individuals or by the medium of firms. Hence in a capitalist economy, for producing adequate outputs, all are required to work employing the productive assets. All the decisions are made by individuals and firms.

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