Macroeconomic Activity and Economic Growth
Up to this point we have mainly focused on issues of a ‘microeconomic nature’. This means that we have analysed the behaviour of individual or specific sectors or parts of the economy, such as demand, supply and price of particular products, or government intervention in various markets. We will now move to examine issues of a ‘macroeconomic nature’. This means that we will look at ‘economy wide’ issues, such as ‘aggregate demand’, ‘aggregate supply’ ‘macroeconomic activity,’ ‘output,’ ’employment’ and ‘income.’
Note that a microeconomic analysis assists government policy makers devise policies to improve the structure and performance of particular sectors or markets in the economy such that a more efficient allocation of resources can be achieved. In contrast, a macroeconomic analysis helps to devise policies to improve the performance of the economy as a whole such that the key macroeconomic goals of governments can be achieved.
Animation: What is Macroeconomic Activity?
