Q.Explain any four features of macroeconomics.
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Start your 14-day free trial to unlock the full solution →Macroeconomics analyses the working of the whole economy rather than of individual units. Its distinctive features are explained below.
1. Study of aggregates: Macroeconomics deals with economy-wide totals and averages such as national income, aggregate output, total employment, the general price level and aggregate demand and supply — not with a single household or firm.
2. Theory of income and employment: The central concern of macroeconomics is what determines the level of national income and employment in a country and why there are fluctuations (booms and depressions). Hence it is also called income and employment theory.
3. Lumping method (general equilibrium): Macroeconomics uses the lumping method, studying the economy by grouping all units together and examining how the many markets are interrelated and reach equilibrium together, rather than one market in isolation.
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