Is defined is the study of the economy as a whole, especially whether resources of the society are being utilise efficiently as possible and whether the ability of the country to revenge it privations is growing over time.
Aggregate supply refers to the value of goods and go that can country can produce.
Aggregate demand factor the total amount of using up in the economy by groups much(prenominal) as: consumers, business firms, the government and people from foreign who buy our goods and services.
If aggregate demand is to high then problems such as inflation occur because the amount of people who want to spend exceeds the amount of goods and services that can be produced. yet if aggregate demand is low, the society faces slow growth and unemployment.
In the study of macroeconomics, economists:
* Collect data and information about the levels of production, output, spending and income in the economy
* Describe and explain trends in data
* insinuate strategies for business firms, and policy measures of governments to improve the state of the economy in both the short and long term
perplex used to pick out output, expenditure and income in the macroeconomy is the circular play model of income.
It describes the flow of resources, goods and services and income between the parts of the economy.
Two types of flows, a literal flow of goods, services and resources and money flow of spending and income.
In the factor market firms hire resources from households in return for which households bump income. Majority of households receive most of their income in form of engage or salaries.
In the product market, households and business firms spend their income they prolong earned on goods and services produced by business firms.
Model based upon the idea that we are interdepended we all depend on each other to provide goods and services that satisfy our wants and needs.
savings and investment
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