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Strabo Glossary: Macroeconomics



Macroeconomics is a branch of economics that focuses on the study of the economy as a whole, rather than individual markets or industries. It examines the overall performance, structure, behaviour, and decision-making of an economy at the national or global level. Macroeconomics deals with large-scale economic phenomena and aims to understand and analyse the aggregate behaviour of households, businesses, governments, and other economic actors.

Key Areas

Key areas of focus in macroeconomics include:

  1. Economic Growth: Macroeconomists study the factors that contribute to long-term economic growth, such as productivity, technological advancements, investment, and population growth.
  2. Unemployment: Macroeconomics explores the causes and consequences of unemployment, as well as policies to reduce unemployment and achieve full employment.
  3. Inflation: The study of inflation involves understanding the factors influencing price levels and the impact of inflation on purchasing power, interest rates, and the overall economy.
  4. Fiscal Policy: Macroeconomists examine the role of government spending and taxation in influencing economic activity and stabilizing the economy during periods of recession or expansion.
  5. Monetary Policy: This area focuses on the role of central banks in controlling the money supply, interest rates, and credit to influence economic conditions and maintain price stability.
  6. International Trade and Finance: Macroeconomics also includes the study of international trade, exchange rates, balance of payments, and the effects of international economic interactions.


Macroeconomists use various theoretical models and empirical analysis to understand how different economic factors interact and affect overall economic performance. They often use economic indicators, such as Gross Domestic Product (GDP), unemployment rate, inflation rate, and trade balances, to assess the health and trends of the economy.

In Summary

Policy decisions made by governments, central banks, and international organisations are often based on macroeconomic analysis. Macroeconomics plays a vital role in guiding economic policies and understanding the potential impacts of changes in economic variables on the welfare of individuals and the overall society.

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