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The macro aspects of economics, concerning the determination of aggregate quantities in the economy. Macroeconomics considers what determines total employment and production, consumption, investment in raising productive capacity, and how much a country imports and exports. It also asks what causes booms and slumps in the short run, and what determines the long-term growth rate of the economy, the general level of prices, and the rate of inflation. Macroeconomics considers how these matters can and should be influenced by government through monetary and fiscal policies. It is contrasted with microeconomics, which is concerned with disaggregated quantities, such as the incentives operating on individuals and firms in the economy, the organization of production, and the distribution of incomes. The emphasis on building macroeconomic models on the basis of microeconomic foundations has lead to an amalgamation of the two in many instances. See also macroeconomic policy.

Subjects: Economics.

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