Macroeconomics

Macroeconomics is the branch of economics that is concerned with economic aggregates. It is contrasted with microeconomics, which deals with [Page 945]individual “agents” such as individuals, households, and firms; and with individual markets, insofar as macroeconomics focuses on how the economy as a whole functions. Thus, macroeconomics is concerned with understanding the determination of aggregates such as total production, income, and employment in the economy; aggregate consumption; saving and investment; government spending and the government debt; the interest rate; the average wage and price levels; inflation and the inflation rate; and the growth rate of output, exports, imports, and the trade deficit. The distinction between macroeconomics and microeconomics, however, is not always clear cut, because in analyzing economic aggregates some economists, seeking what they call ...