Advantages of Macroeconomics


Advantages of Macroeconomics

  1. Macroeconomics helps in understanding the economic fluctuations
    • It acts as a pathfinder in the determination and direction of economic policies
  2. Macroeconomics helps in formulation of economic policies
    • It has played a very important role in determining the policies of the modern planning era. 
  3. Macroeconomics helps in studying inflation and deflation
    • Many monetary problems, like, inflation and deflation etc. can be analyzed with the help of macro approach and controlled by adopting the appropriate monetary policy.
  4. Macroeconomics helps in study of national income and GDP
    • It is very important in Special Areas like international trade, national income, national investment where only macro approach applies not micro economics.
  5. Macroeconomics helps in the functioning of an economy and understanding Paradoxes
    • It is necessary-to take the help of macro economics in understanding the situation under paradoxes because sometimes conclusions drawn-for individual units are not appropriate from the point of view the whole economy. 
    • For example, individual savings is a. blessing, while suppose situation like every person of that country is saving money, will be a curse.

Limitations of Macroecoomics

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