Economics is the study of how individuals and groups make decision with limited resources to meet their best want and needs.
Also it study the changes in choices that may occur in future economics divides into two subjects: microeconomics and macroeconomics where microeconomics is the study of the choices that individuals and business make and how it interact and influence other decision, and macroeconomics is the study of the effect on the national economy and the global economy of the choices that individuals the business make.
In my essay I will be explaining two point in details what is macroeconomics is about, what macroeconomists do.
What macroeconomics about?
As I mention in my introduction macroeconomics is studying the performances of natural economy and the policies that government use to effect the economy.
Its study the 4 issues:-
-Long run economics growth.
LONG RUN ECONOMIC GROWTH:-
In general economic growth is increase the capacity of the economy to produce goods and services which come of the increase of population although long run economics growth is related in the increase of the quantity and quality of the factors of production :-
For example traveling to a developing country bring into mind the difference in living standards relative to those countries and the problems of food , shelter and health cares that the pour citizen experience in a rich nation which that represent the average for the people.
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Looking to it from macroeconomics view the difference between the rich and developing nation is that rich nations might have in some point experienced extended periods of fast economic growth but the poor nation either have never experience or have had periods of growth setoff by economics deadline .
The business cycle show up when there is fluctuation that the economy experience over the short run, business cycle most describe changes in the demand side of the economy by measuring GDP.
GDP= C + I + G + NX.
In the short run the GDP doesnâ€™t stay constant and will show some changes for many reasons. Such as changes in government polices of taxes and interest rate (economic reason) and war, natural disasters (non economic reasons).
Macroeconomist put a lot of effort to figure what causes business cycles and decides what should be done about it.
Looking out the figure (1) we can tell that:-
-The downward phase of business cycle show recession where is the nation output may be falling or growing very slowly.
– The upward phase of business cycles shows expansion where there is increase in the growth rate during economic.
Unemployment is the state where a person or group are looking for paying job but not having any retired full time students , children’s and those not actively looking for a paying job does not called unemployment.
There are many reasons same of it economic , social , political and other reason.
Increasing in the rate of population growth tend the scientific and technological revolation affect in the rate of unemployment.
The cost of unemployment include output lost when fewer people are working and the personal or psychological costs for unemployed workers and families.
The economy describe inflation as it is the increase of the prices level of goods and services over period of time .
While the opposite decreasing in the price level of good and services over period of time called deflation.
Inflation and deflation are mostly related to the money because they are controlling the level of the prices therefore money is losing value.
For example if the price level rises persistently people need more money to make transactions. Incomes rise so firms must pay productions and if prices rise consumers must take more money with them for shopping but the value of money get smaller and smaller .
Inflation is a problem that government take it seriously and preventing inflation is the main task of monetary policy .
Inflation mostly result from increasing in demand or decreasing in supply which is called :
Demand pull inflation can a rise from any factor that effect and increase the demand such as increasing the quantity of money , increasing government purchases and increasing in export while cost push inflation can result from any factor that effect and decrease the supply such as increasing the money wages rates and increasing the money prices of raw materials.
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Whether inflation is demand pull or cost push inflation is costly it anticipated or unanticipated. The costs of anticipated inflation which are relatively minor ( resources used by individuals and firms to reduce their holding currency) and menu cost ( cost of changing during the inflation) further more unanticipated inflation causes unpredictable transfers of wealth for individuals and firms.
The cost of unanticipated inflation is the risk gain and losses and the resources that people expend in trying to reduce this risk. Also it may reduce the efficiency of the market system by making it more difficult for people.
WHAT MACROECONOMISTS DO :
In this part of the essay I will explaining more how do macroeconomists use their skills and what they do with the data they gather.
Macroeconomists do many activates such as forecasting, macroeconomic analysis, basic research and data development for government.
Forecasting is a minor, part of economic the reason that macroeconomists donâ€™t emphasize forecasting is that on the whole they are not terribly good at it, forecasting difficult not only because we have imperfect understanding of how economy works, but because it is ( impossible ) to take into account all the factors that may affect future economics trends.
Macroeconomic analysts monitor the economy and think about the implication of the economic events. Analysts employed in private sector ”bank” to determine how general economic will affect their employers, their opportunities for expansion and the product demand.
But in the public sector such as national government there main function is the assist in policy making, writing reports that solve macroeconomic problems.
Macroeconomic research :-
It takes variety of forms. From mathematical analysis to psychological. The goal of the research is to make general state how economic work.