What is macroeconomics?
Taxes are a feature of macroeconomics and are one of the crucial economic issues in this area.
Macroeconomics is considered to be one of the two main topics within economics, along with microeconomics.
Macroeconomics is the study of an economy as a whole and, as such, advocates an approach ” from top down ” of the economic study.
The history of modern macroeconomics dates back to John Maynard Keynes, a British economist, whose theories were very influential during the early 20th century.
Although some, both at the time and in later years, argued against Keynes’s ideas, for example, the Austrian-British economist Friedrich August von Hayek, Keynes has remained a popular figure in the world of economics, and his Ideas have developed in new schools of thought, such as the Post Keynesian school.
Keynes had many ideas and theories, but one of the most enduring is that the economy is largely influenced by aggregate demand. As a result, Keynes was a staunch advocate of public spending, particularly in times of economic recession, to help stimulate the economy and promote economic growth.
Although Keynes is considered the modern founder of macroeconomic thought, there is much more to learn about macroeconomics than Keynes.
Fundamentally, macroeconomics studies key issues that influence the economy as a whole, such as:
The levels of employment or unemployment in a country or around the world;
Market failures and their consequences;
The current fiscal policies around the world; Y
The rate of inflation.
For this reason, macroeconomics can also play a crucial role in formulating a framework for economic policies. In fact, economists working for government agencies examine macroeconomic factors within the country to understand and assess which economic policies would be most beneficial to the country and the economy as a whole.
Economic policies influenced by macroeconomic analysis include:
The corporate tax rate in effect for current and future years;
Measures designed to improve employment rates and job stability throughout the country; Y
Inflation measures and policies
While macroeconomics plays a very important role in the study of economics, economics students must also understand the field of microeconomics and how it interacts with macroeconomics in order to have a more complete picture of what the study of economics entails.