What is macroeconomy?

What Does macroeconomy Mean

The economy is part of the social sciences and focuses on the analysis of the processes of production, exchange and consumption of goods and services . It is the discipline that studies the satisfaction of unlimited needs with scarce resources.

The macroeconomics , meanwhile, is the branch of economics that is responsible for studying the economic systems of a region or country as a whole. For this, it uses collective magnitudes such as national income or the level of employment, among others.
Macroeconomics, therefore, studies the total amount of goods and services produced in a given territory. It is usually used as a tool for political management , since it allows us to discover how to allocate (scarce) resources to promote economic growth and improve the well-being of the population.

In general, macroeconomic studies are carried out at the national level (that is, they study the economic phenomena that occur within a country based on the relationships that internal actors maintain with each other and with the outside world).
Given the multiplicity and complexity of economic relationships, macroeconomic models are used to facilitate the studies, which are based on simplifying assumptions.
The opposite concept to macroeconomics is microeconomics ; in this case, the discipline is in charge of studying the economic behavior of individual agents (consumers, workers, companies, etc.).
In both macroeconomics and microeconomics, the factors studied must be considered from the relationships they establish: a consumer can also be a producer and investor , for example.
National income
The monetary value of the total goods and services that are produced within a country over the course of a year is known as Income or National Income. It is important to note that those products that have not been available on the market during the period to be analyzed should not be added, as this results in an error called " double counting ". In order not to fall into this problem, the magnitude of the inputs that a company buys and the outputs it produces are subtracted (the English terms refer to income and expenses , respectively).
On the other hand, added value is taken into account , a concept that refers to the series of expenses that surround the purchase of materials and services from third parties, such as the payment of salaries to employees, the rental of offices or buildings, and the interests derived from the capital that is borrowed, among others. If all the added values ​​generated by each production unit in a country over the course of a year are added, the income generated by it is obtained.

The definition of national income can be established from three very different points of view:
* such as the magnitude of the services and goods that have been produced, making sure not to incur the concept of double counting;
* as the total of the incomes that are received through the different factors of production ;
* as the sum of expenses, which may have been allocated to the acquisition of consumer goods or investment.
This is so because the value of total production is distributed (or distributed) among each and every one of the factors that are part of production. Given that the products that a company cannot sell, that is, that it accumulates in its deposits (known as involuntary stock), are considered as an investment (from an economic perspective), it is always possible to verify that the magnitude of savings is equivalent to that of investment .
Cabe mencionar, por último, que los gastos públicos que realiza el Estado para adquirir bienes y servicios (tales como equipos informáticos, material de oficina, sueldos de los funcionarios y armas) también forman parte de la renta nacional.

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