What is Macroeconomics? What does it study?

Macroeconomics is the branch of economics which studies an economy as a whole or at aggregate levels.

Here economists study the market as a whole: the national, the local, the aggregate of firms (total) and the associated sectors. It also includes economic phenomenon such as production, trade, financial intermediation and includes discussions upon issues such as international trade, economic growth, financial markets and banking.

There are many different kinds of macroeconomic analysis. For example, there are industrial models that try to determine how much total production would be reduced by the presence of a government-controlled sector or say a monopoly. A labor market model may find that unions cost employers money as well as how the quality of their work is affected. There are also models which specifically study tax rates, levels of unemployment, etc which can be used to analyse an economy as a whole and it’s subsequent impacts.

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