What is macro economics?

Macroeconomics means using interest rates, taxes and government spending to regulate an economy’s growth and stability. It is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national and global economies. Macroeconomists study topics such as GDP, unemployment rates, national income, price indices, output, consumption, unemployment, inflation, saving, investment, energy, international trade, and international finance.

Various macroeconomic issues

The issues are: 1. Employment and Unemployment 2. Infla­tion 3. The Trade Cycle 4. Stagflation 5. Economic Growth 6. The Exchange Rate and the Balance of Payments

Issue # 1. Employment and Unemployment:
Un­employment refers to involuntary idleness of resour­ces including manpower. If this problem exists, society’s actual output (or GNP) will be less than its potential output. So one of the objectives of Govern­ment policy is to ensure full employment which implies absence of involuntary unemployment of any type.

Issue # 2. Inflation:
It refers to a situation of constant­ly rising prices of commodities and factors of produc­tion. The opposite situation is known as deflation. During inflation some people gain and most people lose. So there is a change in the pattern of income distribution. Therefore, one of the objectives of government policy is to ensure price level stability which implies the absence of inflation and deflation.

Issue # 3. The Trade Cycle:
It refers to periodic fluc­tuations in the levels of economic or business ac­tivities, i.e., the tendency for output (GNP) and employment to fluctuate over time in a recurring sequence of ups and downs. The periods of good trade alternate with periods of bad trade, or, boom periods of high output and high employment alternate with slump periods of low output and low employment.

In boom periods, employment is low but the rate of inflation is high. In periods of depression (or reces­sion) unemployment is high and the rate of inflation is moderate. In macroeconomics we study the causes of business cycles and suggest remedial measures.
Issue # 4. Stagflation:
Most modern mixed econo­mics suffer from the disease of stagflation which im­plies the co-existence of inflation and unemployment in a stagnant economy. The trade-off between infla­tion and unemployment is perhaps the most complex macroeconomic issue of the day. Every country in the world is now struggling hard to fight the disease of stagflation.

Issue # 5. Economic Growth:
In spite of short-term fluctuations of output that are associated with the trade cycle, the long-term trend of total output has been upward in most industrially advanced country. The trend in the nation’s total output over the long period is known as economic growth.

find that electricity use and access are strongly correlated with economic development, as theory would suggest. Despite large empirical literatures and suggestive case evidence, there are, however, few methodologically strong studies that establish causal effects on an economy-wide basis. There is some evidence that reliability of electricity supply is important for economic growth. We propose that future research focuses on identifying the causal effects of electricity reliability, infrastructure, and access on economic growth; testing the replicability of the literature; and deepening theoretical understanding of how lack ofavailability of electricity can be a constraint to growth.

Issue # 6. The Exchange Rate and the Balance of Pay­ments:
The balance of payments is a systematic record of all economic transactions between the mem­bers of the home country and the rest of the world in an accounting year. These transactions are largely, if not entirely, influenced by the exchange rate. It is the rate at which a country’s economy is exchanged for another currency

GDP Contribution in electricity, unemployment and inflation (india) .

• At an electricity-GDP elasticity ratio of 0.8, electricity will continue to remain a key input for India's economic growth. ... In India, the total power generated has been 1048.5 BU during the FY 2014-15. There has been a shift to renewable power as the same constitutes of 27.25% of the total installed capacity
• India's Gross Domestic Product (GDP) growth has slipped below 5 per cent in the last two quarters as weak demand and slump in investment continue to weigh on the country's economic growth momentum. In rural India, the uptick in unemployment rate was sharper from 6.82 per cent in November to 7.13 per cent in
• Retail inflation for December 2019 increased to 7.35 per cent, highest since July 2014, going past the RBI's limit of 6 per cent. In FY20, India's GDP growth is pegged to be at 5 per cent.

What the government can do:solutions

Monetary policy is policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often as an attempt to reduce inflation or the interest rate to ensure price stability and general trust of the value and stability of the nation's currency

On the other hand, when the central bank needs to absorb extra money in the economy and push inflation levels down, it will sell its T-bills. This will result in higher interest rates (less borrowing, less spending, and investment) and less demand, which will ultimately push down the price level (inflation) and result in less real output.

Fiscal Policy
The government can also increase taxes or lower government spending in order to conduct a fiscal contraction. This lowers real output because less government spending means less disposable income for consumers. And, because more consumers' wages will go to taxes, demand will also decrease.

A fiscal expansion by the government would mean taxes are decreased or government spending is increased. Either way, the result will be growth in real output because the government will stir demand with increased spending. In the meantime, a consumer with more disposable income will be willing to buy more.

The performance of the economy is important to all of us. We analyze the economy by primarily looking at the national output, unemployment, and inflation. Although it is consumers who ultimately determine the direction of the economy, governments also influence it through fiscal and monetary policy.