This document provides an overview of macroeconomics, including definitions, objectives, and methods of measuring national income. It defines macroeconomics as studying an economy as a whole rather than individual markets. The objectives of macroeconomic policies are outlined as maximizing national income to raise living standards. Methods for computing national income are described as the product, income, and expenditure methods. Problems in measuring national income are also discussed. Key terms like gross domestic product, gross national product, and net national product are defined.

1. Honorable Teacher&
Everyone

2.  Presented by
 S.M Al-Shahriar

3.  1.Defination and Emergence of
Macroeconomics
 2.Objectives of Macroeconomics
 3.Instruments of Macroeconomics
 4 .Methods and problems of computing
national income.
 5.concept and measurement of national
income accounting gross.

4.  Macroeconomics
 Macroeconomics is a branch of economics dealing
with the performance, structure, behavior, and
decision-making of an economy as a whole, rather
than individual markets.
 Macroeconomists study aggregated indicators such
as GDP, unemployment rates, and price indices to
understand how the whole economy functions.

5.  Emergence of macroeconomics:
 Macroeconomics, as a separate branch of
economics, emerged after the British economist John
Maynard Keynes published his celebrated book, The
General Theory of Employment, Interest and Money
in 1936.
 a capitalist economy can be defined as an economy,
in which most of the economic activities have the
following characteristics,
 (a) There is private ownership of means of
production
 (b) Production takes place for selling the output in
the market
 (c) There is sale and purchase of labor services at a
price which is called the wage rate (the labor which
is sold and purchased against wages is referred to
as wage labor).

6.  Macroeconomic objectives
 The objective of macroeconomic policies is to
maximize the level of national income,
providing economic growth to raise the utility
and standard of living of participants in the
economy.

7.  Sustainability - a rate of growth which allows an
increase in living standards without undue structural
and environmental difficulties.
 Full employment - where those who are able and
willing to have a job can get one, given that there will
be a certain amount of frictional, seasonal and
structural unemployment (referred to as the natural
rate of unemployment).
 Price stability - when prices remain largely stable, and
there is not rapid inflation or deflation.
 External Balance - equilibrium in the Balance of
payments without the use of artificial constraints.
 Equitable distribution of income and wealth - a fair
share of the national 'cake', more equitable than would
be in the case of an entirely free market.
 Increasing Productivity - more output per unit of labor
per hour.
 Thermal Equilibrium - equilibrium in the Balance of
payments without the use of artificial constraints.

8.  3.Instruments of Macroeconomics:
 Macroeconomic policy instruments
 Macroeconomic policy instruments refer to
macroeconomic quantities that can be directly
controlled by an economic policy maker.
Instruments can be divided into two subsets:
 a) Monetary policy instruments and
 b) Fiscal policy instruments.

9.  Monetary policy
 Monetary policy instruments consists in managing
short-term rates (Fed Funds and Discount rates in
the U.S.), and changing reserve requirements for
commercial banks.
 Fiscal policy
 Fiscal policy consists in managing the national
Budget and its financing so as to influence
economic activity.

10. 4 .Methods and problems of computing
national income.
 Methods of computing national income:
 The national income of a country can be
measured by three alternative methods: (i)
Product Method (ii) Income Method, and (iii)
Expenditure Method.
 1. Product Method:
 In this method, national income is measured
as a flow of goods and services.

11.  2. Income Method:
 Under this method, national income is
measured as a flow of factor incomes.
 3. Expenditure Method:
 In this method, national income is measured
as a flow of expenditure.

12.  Problems of computing national Income:
 The main difficulties which are involved in the measurement
of national income are following: In the fewer developing
countries, the accurate figures about the various sectors of
economy are not available due to this we are unable to
estimate the real national income of the country. There is a
shortage of trained staff which may collect the statistics about
the national product. Public is also not ready to provide the
correct figures about the income due to the fear of income tax.
Some people do not keep any proper account about their
business income, so their income is not included in the
national income.

13.  Concept of national income gross:
 Gross National Product (GNP)
 The GNP is defined as the value of all final goods
and services produced during a specific period,
usually one year.
 Gross Domestic Product (GDP)
 The Gross Domestic Product (GDP) is defined as the
market value of all final goods and services
produced in the domestic economy during a period
of one year.

14.  Net National Product (NNP)
 NNP is the amount of goods that can be consumed
within a nation each year without reducing the
amount that can be consumed in following years.

15. National Income: Some Accounting Relationships
 (a) Accounting Identities at Market Price:
 GNP ≡ GNI (Gross National Income)
 GDP ≡ GNP less Net Income from Abroad
 NNP ≡ GNP less Depreciation
 NDP (Net Domestic Product) ≡ NNP less net income
from abroad

16. (b) Some Accounting Identities at Factor Cost:
 GNP at factor cost ≡ GNP at market price less
net indirect taxes
 NNP at factor cost ≡ NNP at market price less
net indirect taxes
 NDP at factor cost ≡ NNP at market price less
net income from abroad
 NDP at factor cost ≡ NDP at market price less
net indirect taxes
 NDP at factor cost ≡ GDP at market price less
Depreciation

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