Answer: Macro economics studies the economy as a whole. Its features are:
- Study of aggregates: It deals with aggregates like national income, total employment, total output, general price level.
- Income theory: It explains the determination of national income and its fluctuations (trade cycles); hence it is called income theory.
- General equilibrium analysis: It studies the equilibrium of the economy as a whole, e.g. aggregate demand and aggregate supply.
- Interdependence: It studies interdependence among aggregate variables like income, output, employment and investment.
- Lumping method: It uses the aggregative or lumping method instead of the slicing method.
- Growth models: It studies factors that determine economic growth and development.
- Policy-oriented: It helps the government frame fiscal and monetary policies to solve problems such as inflation and unemployment.
