Macro Economics

Macroeconomics is the study of the overall economy and how it works. It looks at how the production and consumption of goods and services, the rate of unemployment, the rate of inflation, and the amount of money in circulation are all connected. An analogy that might help you understand macroeconomics is to think of it like a sports team. The team is made up of many different players, each playing their own position. The players have to work together in order to make the team successful. Similarly in macroeconomics, different parts of the economy have to work together to make the overall economy successful. For example, businesses have to produce goods and services, people have to buy the goods and services, and banks have to provide loans to businesses so they can buy the things they need to produce the goods and services. Macroeconomics also looks at the different kinds of policies that governments can use to help keep the economy running smoothly. These policies might include setting interest rates, increasing or decreasing taxes, or creating new programs to help people find jobs. Fun Fact: Macroeconomics is closely related to the field of psychology. Economics is often referred to as the “dismal science” because it deals with the behavior of people in an economic context.