Chapter-1

INTRODUCTORY

MACRO
ECONOMICS
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 MACRO ECONOMICS
● Macro Economics (Birds Eye View) studies
aggregate of economic unit.
● It deals with determination of General Price
level and output in the economy.
● The method of study is called General
Equilibrium Analysis.
● It is also known as Income Theory
● It studies Society which is immortal.
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SUBJECT MATTER OF MACRO
ECONOMICS
● It studies about the level of economic
activities, total output,the general price level
and overall employment in the country
● It studies foreign trade and trade balances

● It studies the causes of disequilibrium in

Balance of Payment (BOP)
● It studies how Monetary and Fiscal Policies

effect the Economy

● It studies how economic policies can
accelerate economic growth
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 THE GREAT DEPRESSION of 1930s

The Great Depression lasted from 1929 to 1939,

and was the worst economic downturn in the history
of the industrialized world. It began after the stock
market crash of October 1929, which sent Wall
Street into a panic and wiped out millions of
investors.

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 THE GREAT DEPRESSION of 1930s
CAUSES
1.Stock Market Crash of 1929. Many believe
erroneously that the stock market crash that
occurred on Black Tuesday, October 29, 1929 is
one and the same with the Great Depression. ...
2.Bank Failures. ...
3.Reduction in Purchasing Across the Board. ...
4.Drought Conditions.
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 THE GREAT DEPRESSION of 1930s

The Great Depression challenged American

families in major ways, placing great economic,
social, and psychological strains and demands
upon families and their members. Millions of
families lost their savings as numerous banks
collapsed in the early 1930s

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 JOHN MAYNARD KEYNES

JOHN MAYNARD KEYNES

English Economist, Journalist,

and Financier, best known for his
economic theories (Keynesian
Economics) on the causes of
prolonged unemployment.

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 JOHN MAYNARD KEYNES
His most important work, The General Theory of
Employment, Interest and Money (1935–36),
advocated a remedy for economic recession based on
a government-sponsored policy of full employment.

Other Important Books of J M Keynes

1.The Economic Consequences of the Peace
2.A Tract on Monetary Reform
3.How to Pay for The War
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