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    Macroeconomics is a branch of economics that looks at the structure of the economy as a whole and how it functions. This can be contrasted to microeconomics, which looks at the economy in smaller pieces, such as how markets and individual firms function. Types of questions that macroeconomics studies is what makes an economy grow and why there is there a lack of development in some countries and not in others. Macroeconomics analyzes topics like economic growth, unemployment, inflation, and the effect of government economic policies.

    An important part of macroeconomics is studying how the business cycle functions. The business cycle is the movement in economic activity and is measured by how real GDP (gross domestic product) moves, as well as other macroeconomic variables. The business cycle can be in a stage of contraction, which is the decrease in pace of economic activity; expansion, the increase in pace of activity; or in a peak of economic activity.

    The aggregate demand and aggregate supply model is used to explain macroeconomics because it shows total price level and level of output. The aggregate supply curve shows the relationship between national price level and quantity of goods/services produced. The aggregate demand curve shows the quantity of goods and services produced domestically that are willing to be purchased by foreign consumers.

    The study of macroeconomics is convergent to microeconomics and encompasses a variety of topics. It is an applied field and uses different economic models and indicators as a part of its study.

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    BrainMass Categories within Macroeconomics

    Income Distribution

    Solutions: 156

    Income is most often earned through wages and is what an individual receives for their hours of labor or investments.


    Solutions: 187

    Unemployment refers to the number of individuals who are unemployed and currently searching for work.

    Aggregate Demand & Supply

    Solutions: 94

    Aggregate demand (AD) is defined as the total demand for final goods and services in the economy (Y) at a given time and price level

    General Equilibrium

    Solutions: 495

    The macroeconomic equilibrium shows how real GDP and price level are determined by the interaction between aggregate demand and aggregate supply.


    Solutions: 7

    Keynesian economics focuses on aggregate demand and how it impacts national output and inflation.


    New Classical

    Solutions: 15

    New classical economics builds on neoclassical ideas and strives to explain how fluctuations in employment and real wages are caused by technological changes and by willingness to work.

    Price Levels

    Solutions: 199

    The price level is the average level of all prices for goods and services in an economy and is expressed as an index number.

    Balance of Payments

    Solutions: 83

    The balance of payments (BOP) tracks the financial transactions made between the government, businesses, and consumers of a country with the rest of the world.

    Expenditure Multipliers

    Solutions: 23

    The expenditure multiplier is the measure of the change in aggregate production caused by changes in autonomous expenditure.

    Business Cycles

    Solutions: 50

    Business cycles refer to the rise and fall of economic growth that an economy experiences over a period of time.



    Solutions: 239

    Banking refers to the monetary and financial activities that exist between the financial institution, the population, and the government.


    Solutions: 23

    Economic globalization is the integration between economies around the world that is due to the increase in international trade, flow of international capital, and the growth of technology.

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