Page 12 - DECO402_Macro Economics

Unit-1: Introduction of Macroeconomics

1.3 Major Macroeconomic Issues Notes

Why we need macroeconomics? Is microeconomics is not sufficient to understand of economic
problems and for their analysis and solution? Certainty not. We study in microeconomics, economic
problem as a individual economic unit as a food industry, production of foods of cloths. But some
problems may be such a type which is related to all industries or generally all production units, as a
infrastructural facilities in which in much quantities electricity (or other means of energy) is needed,
besides credit and other facilities, efficient communication and transport facilities are needed. These
facilities are need to each industry. In fact these are the fundamental necessities of production process.
The solution of these problems are sought at whole economy level. Invested is the compulsion of study
of macroeconomics. Some macroeconomics related problems are mentioned ahead, it is cleared from
that study of macroeconomics as a special branch is necessary.

(1) Growth and Development

Growth and development are the two important factors of macroeconomics or macroeconomics,
related policies. ‘Growth and development’ have become the focus of study of macroeconomics
of different countries economy in this age of globalization. The continuos growth of economics
are essential and this growth (in the form of flow goods and services) should be seems in the form
of increasing standard of living of common people or should be totally improvement of quality of
life. Growth should be transformed in development. Its meaning is that the gaps between haves
and have not should be reduced in course of time. In fact, the problem of growth and development
has got much importance in recent past. Attainment of economic growth should not be done by
(i) dozen fall of environment and (ii) natural resources (particularly non-renewable resources)
excessive exploitation because by this future generations production potentiality may be reduced.
Only in this context economist talks about ‘sustainable development’ and this is the rising problem
of today’s macroeconomics. In fact, planner and politicians are cautioned that they formulated such
a type of macroeconomics related policy by them confirmed consistent economic growth (in the form
of continuing availability of goods and services increasing) and social justice (means in the form of
equal distribution of wealth and income) and neither decay of environment not future generations
production potentiality less by any types.

(2) Employment
In the decade of 1930 whole world was in the grip of great depression. Economic activities had been
down very slowly. The demand of goods and services had been fallen. As a result, massive fall in
commercial benefit and investment cut down at large level and unemployment spreaded. If, in the
production filled a large percentage of active population fakes unemployment then it becomes such
a problems whose solution at the whole economy level become very essential. This is an important
problem of macroeconomics. In India unemployment continues a dreadful problem. Unskilled
labourer at great scale suffering from rural unemployment. In urban areas too in skilled artisians
founds amazing unemployment and under employment. In our country unemployment problem is
so vast and long term that government has subjected to give reservation in government jobs. This
reservation are trying to implement in private sector also. In fact, why will be needed reservation if
all those who are ready to work on given wages, in great number jobs should be created? It can be
said certainly that our country is not developing at that rate on which whole man power of country
can be employed.
Unemployment is not a characteristics of underdeveloped country as India. This is a serious problem
of developed country like U.K. and U.S.A. In developed and underdeveloped countries only difference

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