Modern economic analysis has been divided into two main branches like micro-economics and macro-economics. The word ‘micro’ comes from the Greek word ‘mikros’ meaning small. Therefore microeconomics whose literal translation is ‘economic in the small’, studies the economic actions of the individual economic units like a household or a firm. Similarly the word ‘macro’ has been derived from the Greek word ‘macros’ meaning large. So macroeconomics literally means economics in the large’ which studies the economic aggregates like national income, aggregate output and general price level.

Meaning of Macroeconomics

Macroeconomics refers to that branch of economics which studies the aggregate economic variable like the national income, aggregate output and general price level.

According to K.E Boulding, “Macroeconomics is that part of economics which deals with the great aggregates and averages of the system rather than with particular items in it and attempts to define these aggregates in useful manner, and to examine how they are related and determined.”

Edward Shapiro defines, “Macroeconomics, in its briefest description, is the study of the economy’s total output, employment and the price level”.

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