How are the components of macroeconomics related?

Economics Dec 15, 2020

Expert Solution

The various components of macroeconomic analysis are given below:

1. Determination of income and output.

2. Unemployment rate.

3. Rate of inflation.

4. Level of aggregate demand and aggregate supply.

5. Economic growth models.

6. Economic policies (monetary policy and fiscal policy).

The study of macroeconomics, therefore, deals with the aggregate economic system. All these above mentioned macroeconomic components are interrelated to each other with respect to the state of economic growth of an economy.

For instance:

The level of aggregate demand and supply are the key determinants of economic development and the level of national income, which decides the growth rate of an economy.

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