National Income

and Related
Aggregates

Macroeconomics : The term Macro in

English has its origins
Macroeconomics is defined as that of branch economics, which studies in the greek term
economic issues or economic problems at the level of an economy as a whole. Makros, which means
large.
• It studies problems of scarcity and choice at the level of an economy as a
whole.
• Variables like distribution of output/income is taken as a constant.
• Determination of the overall level of output is the central issue.
Economic questions
• It uses macroeconomic variables like aggregate demand and aggregate
concerning the welfare
supply. of all residents of a
• There is a wider degree of aggregations, as economic problems are studied country : employment
at the level of an economy as a whole. for the residents,
• Economic decisions are taken by the 'institutional economic agents' like growth of output in the
RBI, SEBI, and TRAI. economy, inflation and
• Method of study is often described as 'general equilibrium analysis’. deflation.