Macro Flashcards, test questions and answers

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What is Macro?

Macroeconomics is the branch of economics that studies the behavior and performance of entire economies. It is concerned with the aggregates, or overall measures, of economic activity, such as gross domestic product (GDP), inflation, and unemployment. Macroeconomic analysis typically looks at the big picture of the economy and seeks to understand the underlying causes of economic growth or recession. One of the primary tools used in macroeconomics is the concept of aggregate demand and aggregate supply. Aggregate demand refers to the total demand for goods and services in an economy, while aggregate supply refers to the total amount of goods and services that businesses are willing and able to produce. Macroeconomic analysis seeks to understand how changes in these aggregate measures affect the overall health of the economy. Another key concept in macroeconomics is fiscal policy. Fiscal policy refers to the use of government spending and taxation to influence the overall level of economic activity. Governments may use fiscal policy to stimulate economic growth during times of recession or to cool down an overheating economy during times of rapid expansion.