Basic concepts of Macroeconomics

Basic concepts of Macroeconomics

Introduction

    The term macroeconomics was first used by the economist Ragnar Frisch in 1933 AD. The term ’macro’ was derived from the Greek word ‘Makros’, which means broad or large. Macroeconomics analyzes the performance of the entire economy. Macroeconomics is defined as the branch of economics which deals with the economy as a whole. It is concerned with the aggregate and average variable of the entire economy such as national income, total employment, total output, total saving, total consumption, total investment, per-capita-income, aggregate demand, aggregate supply, general price level, and inflation, etc.

     Macroeconomics emerged as a separate branch of economics after the publication of John Maynard Keynes’ book entitled 'The General Theory of employment, interest, and money, in 1936 AD.'

According to K.E. Boulding, “Macroeconomics deals not with individual quantities but with an aggregate of these quantities, not with individual income but with national income, not with individual prices but with price level, not with individual output but with national output. "  
    -K.E Boulding

According to P.A. Samuelson, “Macroeconomics is the study of the behavior of the economy as a whole. It examines the overall level of national output, employment,  prices, and foreign trade.” 
-P.A. Samuelson