Macroeconomics studies the overall economy rather than individual markets. It develops models of the relationships between factors like inflation, national income, unemployment, savings, investment, and international trade. The scope of macroeconomics includes theories of national income, employment, the general price level, economic development, international trade, money, and business fluctuations. Macroeconomics helps businesses understand trends in the domestic and foreign economic environments so they can make informed decisions about expanding or setting marketing strategies.

2. The word macro-economics has been derived from
Greek word “makro ”which means large. It studies whole
part of economy rather than part of it .so ,it gives us
bird’s eye view of economy. 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. This includes
national, regional, and global economies. Macro-
economics develops models which shows relationship
between factors like inflation, national income,
unemployment ,savings, investment and international
trade.

3. Scope of macro-economics:
1.Theory of National Income:-Macro economics studies the
concept of national income, its different elements, methods of
its measurement and social accounting.
2.Theory of Employment:-It studies the problems of employment
and unemployment. There are different factors which determine employment.
They are like effective demand, aggregate demand, aggregate supply, total
consumption ,total savings and total investment etc.
3. Theory of General Price Level:-A continuous rise in the price
level is called inflation. It distorts production. It increases inequalities in the
distribution of income and wealth. The common man is injured by inflation.
Deflation is the opposite of inflation. The general price level falls continuously.
Output and employment levels fall. Macroeconomic provides explanation
provides explanation for the occurrence of inflation and deflation

4. 4.Economic development:-UDC's are blessed with
mass poverty and low per capita income curve for
economic development. Economic development is a
long run process. In it, we analyze the problems and
theories of development.
5.Theory of International Trade:-It also studies
principles determine trade among different countries.
Tariff's protection and free-trade polices fall under foreign
trade.
6.Theory of Money:- Changes in demand and supply of
money effect level of employment. Therefore ,under macro
economics functions of money and theories relating to
money are studied.
7.Theory of Business Fluctuations:-It also deals
with
The nature and causes of fluctuations of macro economic variables in
the level of employment, total expenditure, general price level.

5. Types of macro-economics:
1. Simple micro-statics:
It is type of macro-economics which shows
that macro economic variable like aggregate
demand , aggregate supply remains constant
over given period of time due to which
equilibrium point remains constant over
given period of time. The
Equilibrium can be achieved
When Y=C+I
where Y=income
C=consumption
I=Income

6. Comparative micro-statics:
It is type of macro-economics which
shows comparison between two
equilibrium positions attained by an
economy. It was developed by German
economist F. Oppenheimer, in 1916 . It
shows how the shift occurs between
two equilibrium positions. It provides
answer to:
1.What shows new equilibrium?
2.What are comparative
difference between two
equilibrium positions?

7. Macro-dynamics:
It is type of macro-economics which
shows lagged relationship between
macroeconomic variables. This macro
economics shows changes between
two equilibriums. It studies fluctuations
of economy at various points of time
so it involves period analysis. It
provides answer to following
questions:
1.what are causes of
establishing new equilibrium
positions?
2.what are changes between two
equilibrium positions?

8. Macroeconomics and business environment
The effect of macroeconomics can be seen in business as
business set their marketing and sales strategy on basis of
macro economic factors sucha as inflation,deflation,boom and
recession.The major use of macroeconomics in making
business decisions are:
1.Study the trends of domestic business environment:
There may be various matters which are related to trends in
economy such as trends in employment,pricelevel ,investment
climate etc.so macroeconomics helps to identify such trends by
asking questions like:
*What is general trend in the economy?
*What is consumption pattern of the society?
*Will it be profitable to expand the business?

9. 2.To study trends of foreign market:
Now –a-days most of the country
have open economy and they follow
international trade. So, fluctuations in
international market, exchange rate
have serious effect in a country’s
economy. Business entrepreneurs are
interested in knowing about such price
fluctuations, exchange rates which is
possible with help of macroeconomics.