Uses of Macroeconomics || Nature and Scope of Macroeconomics || Bcis Note

 Uses of macroeconomics are given below:

1  For making business decisions.

• To understand the operation of a state-controlled economy.
• Pricing, forecasting, administrative, financial and other policies.
• Based on the trend of macroeconomic variables.
• The investment climate, price trends, relation with other countries, government economic policies, etc.

2  Uses of macroeconomics are applied in economic planning (concerned with aggregate variables.

• Economic planning is the process through which we can make the decisions of what and how it is to be produced through controlling and managing the economic activity. It is an economic program speculated for the development of the regional economic system.

3  Development of Microeconomics theories.

• Macroeconomics evolves with the evolution of the economy. Macroeconomic theories change over time. They keep on changing because major economic events — such as the Great Depression of the 1930s the Great Inflation of the 1970s — bring into focus problems within a prevailing theory. Eventually, the theory is modified.

4  Making international comparisons on the economic level.

• International comparisons, or national evaluation indicators, focus on the quantitative, qualitative, and evaluative analysis of one country in relation to others. Often, the objective is to compare one country’s performance to others in order to assess what countries have achieved

 

    Limitations of Macroeconomics

1. The problem of averaging economic variables.
2. Problems in measuring heterogeneous aggregates.
3. An unreliable estimate of aggregates.
4. Variation in the degree of economic fluctuations.

 

  Macroeconomics Indicators

1. Nominal GDP
2. Real GDP
3. GDP deflator
4. GDP at producer’s price
5. Aggregate demand and saving
6. Government finance- revenue, expenditure, and fiscal deficit
7. Monetary aggregates – Narrow money and Broad money

 

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