Macroeconomics analyzes the economic systems of a country or a region as a whole.
Macroeconomics is the branch of economics that is responsible for studying the economic systems of a region or a country as a whole. For this, it uses collective magnitudes such as national income or the level of employment , among others.
Economics , in turn, 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.
Object of study of macroeconomics
Macroeconomics studies the total amount of goods and services produced in a certain territory. It is usually used as a tool for political management , since it allows us to discover how to allocate (scarce) resources to enhance economic growth and improve the well-being of the population.
Generally, 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 among themselves and with the outside world). Given the multiplicity and complexity of economic relationships, macroeconomic models are used to facilitate studies, which are based on simplifying assumptions.
National income is one of the magnitudes studied by macroeconomics.
The economic behavior of individual agents
The opposite concept to macroeconomics is microeconomics ; In this case, the discipline is responsible for the study of the economic behavior of individual agents (consumers, workers, companies, etc.).
In both macroeconomics and microeconomics, the factors studied must be considered based on the relationships they establish: a consumer can also be a producer and an investor , for example.
Macroeconomics and national income
The monetary value of the total goods and services produced within a country over the course of a year is known as national income or income . It is important to note that products that have not been available on the market during the period being analyzed should not be added, as this results in an error called double counting . To avoid falling into this problem, the magnitude of the inputs that a company purchases and the outputs that it produces are subtracted (the terms of English origin 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 surrounding 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 interest derived from the capital that is borrowed, among others. If all the added values generated by each unit of production in a country are added over the course of a year, 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 income that is 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 because the value of the total production is distributed (or distributed) among each and every one of the factors that are part of the production. Given that the products that a company cannot sell, that is, accumulates in its warehouses (known as involuntary stock), are considered an investment (from an economic perspective), it is always possible to verify that the magnitude of savings is equivalent to that of investment .
Finally, it is worth mentioning that the public expenses incurred by the State to acquire goods and services (such as computer equipment, office supplies, salaries of officials and weapons) are also part of national income.