Page 6 - DECO201_MACRO_ECONOMICS_ENGLISH

Ashwani Panesar, Lovely Professional University
Unit 1: Introduction to Macro Economics

Unit 1: Introduction to Macro Economics Notes

CONTENTS
Objectives
Introduction

1.1 Developments of Macro Economics
1.1.1 Classical Macro Economics
1.1.2 Keynesian Macro Economics

1.1.3 Post Keynesian Macro Economics
1.2 Importance of Macro Economics
1.3 Scope of Macro Economics
1.3.1 Objectives
1.3.2 Instruments of Macro Economic Policy

1.4 Summary
1.5 Keywords
1.6 Review Questions

1.7 Further Readings
Objectives

After studying this unit, you will be able to:
Realise the importance of Macro Economics;
Discuss the development of the knowledge of Macro Economics;
Describe the scope of Macro Economics;

Identify the major Macro Economic instruments.

Introduction

Economics is the study of how people choose to allocate their scarce resources to meet their
unlimited wants and involves the application of certain principles like scarcity, choice, and
rational self-interest, in a consistent manner. The study of economics is usually divided into two
separate branches, namely Micro Economics and Macro Economics. In this course, you will
study the concepts of Macro Economics.
Macro economics is the branch of economics which deals with economic aggregates. It makes a
study of the economic system in general. Macro Economics perceives the overall dimensions of
economic affairs of a country. It looks at the total size, shape and functioning of the economy as
a whole, rather than working of articulation or dimension of the individual parts. To use Marshall's
metaphorical language, Macro Economics views the forest as a whole, independently of the
individual tress composing it. Macro Economics is, in fact, a study of very large, economy- wide
aggregate variables like national income, total savings, total consumption, total investment,

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