What is Macroeconomics

Macroeconomics is a branch of economics, which deals economical factors like behavior, structure, and performance of a large economy as a whole. The study of economical indicators like GDP, census, inflation, unemployment rate and many others falls under the category of macroeconomics. . Now let us discuss the components of macroeconomics in detail.

GDP(Gross Domaestic Product)

The abbreviation of GDP is gross domestic product. The total amount of products and services produced in a particular state, region or country is called as the GDP of that particular state, region or country. GDP of a every state, province and country is calculated in a quarterly basis and this figure shows, whether the particular state, province or country is making progress or not and if progressing then with what rate.


The rate at which the price of the products and services increases or the rate at which the buying power of the money decreases, is called as the inflation. The government of each and every state and country calculate the inflation rate. This helps the governments to understand the overall economic situation of their countries or states. High inflation rate is not good for an economy as the citizens feel the pinch of price rise. On the other hand, negative inflation or deflation is not also considered as healthy for an economic.

The governments control the inflation rate by taking certain measures like altering the repo rate and reverse repo rate. When the inflation increases, the governments generally increase the repo rate and suck the money from the market. On the other hand, when the inflation rate decreases, the government decreases the repo rate.

Unemployment Rate

Each and every government should know how much percentage of the citizens of their country or the state is unemployed. In fact, the governments calculate the unemployment rate, instead of the number of unemployed people. If this rate grows then the government tries to create new jobs and that brings the unemployment rate down.


The government of a country or a state should know how many people are residing in their states or countries. This is why, government of each country and state do census in a particular interval of time and releases the data of the survey for common people also. Not only the number of citizens but many more things gets revealed from this census survey like literacy rate, sex ratio and many more.

Macro economics is one of the major part of economics. The study of maco economics is very necessary for any economy. The financial disaster happened in 2008 was because of the faulty study macro economics indicators. Financial pundits assessed the macroeconomics indicators wrongly and the whole world paid a great toll for it.