Macroeconomics

1. Distinguish Micro & Macro

2. Describe macroeconomic polices & tools.

3. Describe macroeconomic problems.

4. What's the scope of Macroeconomics.

1.

A.1. It is taken from the Mikros which means a small/millionth part.

B.1. It is taken from the Macros which means large/collective.

A.1. It is individualistic in nature.

B.2.It is aggregative in Nature.

A3. It studies individual consumer/producers.

B3. It studies all consumer/producers.

A4. It is useful for making inter-firm comparisons.

B4. It is useful for making international comparisons.

A5. It is based on partial equilibrium analysis.

B5. It is based on general equilibrium analysis.

A6. The scope of microeconomics include demand/supply analysis, pricing theory,

distribution theory & welfare economics.

B6. The scope of macroeconomics include NI, inflation, theory of employment, trade
cycles, AD, AS etc.

Eco analysis can be microeconomic & macroeconomic. However, the study of both is
essential to draw meaning conclusions. Eg. If one company is making losses, its doesn't
mean that the industry is making losses & both are to be studied together to draw
meaningful conclusion.

2. Various economic policies are:

A. Monetary policy (discuss meaning, types, objectives & tools in chp.10)

B. Fiscal policy (discuss meaning, types, objectives & tools in chp.5)

The other macroeconomic policies are

C. Trade policy - you'd policy is concerned about export-import policy & foreign policy.
The basic objective is to increase exports of the country, control imports & solve BoP
problems.

The tools are :

A. Custom duties

B. Subsidies

C. Licensing & etc.

3. Problems are :

A. High/low growth rate.

B. Problem of unemployment / underemployment.

C. Inflation / deflation.

D. Existence of Poverty ( Absolute/ BPL, relative).

E. Greater inequalities in the income distribution.

F. Trade cycles / business cycles (Depression , recession, prosperity)

G. Problem of under-utilization of resources.

4. Scope:

A. NI

B. Circular flow of income

C. Theory of employment.

D. Trade cycles or business cycles.

E. Inflation / deflation.

F. Unemployment/ underemployment.

G. AD & AS.

H. Macro Policies

Paper pattern

1. Concept question. (5/7) 2m.

2. 3. 4. 5. 6. 7. (5/6) 10m

Problems on:

1. NI calculation.

2. GDP/GNP.

3. GDP Deflator.

4. Price index/ inflation.