Macroeconomics involves the study of how the limited resources are utilized by a whole economy in production of goods and services for consumption. Economies can be those of state or even the world. The overall decisions concerning the economic factors affecting the whole economy are made. The economic factors affecting the state include the total national earning, the rate of employment, inflation and deflation rates and the total worth of the goods and services produced in the state among others.

Macroeconomics is also called the price and employment theory. This is because its major concern is to define the balance of the national economic earning on the basis of the prices of goods and services and the levels of employment in the economy. Therefore, prices of goods and employment levels forms the basis of the development of macroeconomic theory.