Economics-For Managers

In this chapter, we discussed the role of macroeconomic variables in analyzing the problems in the economy. There are two types of economic activity in an economy -- micro and macro. A problem or activity at a firm level is a micreconomic problem or activity, while a problem or activity at an industry level becomes a macroeconomic activity.

Macroeconomics gained importance after the Great Depression of 1930s. The growth of macroeconomics led to various schools of thought such as Keynesian economics, the Monetarists, supply side economics etc. The macroeconomic performance of a country can be measured with the help of the gross domestic product (GDP), the level of employment in the economy, and movements in the price level.

The government can use fiscal and monetary policies to achieve macroeconomic objectives such as full employment, high level of output, stable prices, rapid economic growth.