PPT: Introduction to Macroeconomics | Economics Class 12 - Commerce PDF Download

 Page 1


Introduction to 
Macroeconomics
Page 2


Introduction to 
Macroeconomics
Introduction 
What is Macroeconomics?
The study of the economy as a whole, 
analyzing aggregate economic indicators like 
national income, unemployment rates, 
inflation, and economic growth.
Macroeconomic vs. Microeconomic 
Approach
M i c r o e c o n o m i c s studies individual economic 
units (e.g., households, firms), while 
m a c r o e c o n o m i c s looks at the economy in 
total, including factors like GDP and inflation.
Page 3


Introduction to 
Macroeconomics
Introduction 
What is Macroeconomics?
The study of the economy as a whole, 
analyzing aggregate economic indicators like 
national income, unemployment rates, 
inflation, and economic growth.
Macroeconomic vs. Microeconomic 
Approach
M i c r o e c o n o m i c s studies individual economic 
units (e.g., households, firms), while 
m a c r o e c o n o m i c s looks at the economy in 
total, including factors like GDP and inflation.
The Context of the 
Present Book
The Purpose of This Textbook
This textbook aims to introduce the foundational 
principles of macroeconomics while providing 
tools for analyzing real-world economic scenarios. 
It covers various macroeconomic theories and 
policies that shape national economies.
Page 4


Introduction to 
Macroeconomics
Introduction 
What is Macroeconomics?
The study of the economy as a whole, 
analyzing aggregate economic indicators like 
national income, unemployment rates, 
inflation, and economic growth.
Macroeconomic vs. Microeconomic 
Approach
M i c r o e c o n o m i c s studies individual economic 
units (e.g., households, firms), while 
m a c r o e c o n o m i c s looks at the economy in 
total, including factors like GDP and inflation.
The Context of the 
Present Book
The Purpose of This Textbook
This textbook aims to introduce the foundational 
principles of macroeconomics while providing 
tools for analyzing real-world economic scenarios. 
It covers various macroeconomic theories and 
policies that shape national economies.
The Context of the Present 
Book
Key Players in the Economy
Households: Consumers that provide labor and 
capital in exchange for income.
Firms: Organizations that produce goods and 
services using the factors of production (labor, 
capital).
Government: Sets economic policies, regulates 
markets, and provides public goods.
External Sector: Includes foreign trade and 
investment, influencing domestic markets.
Page 5


Introduction to 
Macroeconomics
Introduction 
What is Macroeconomics?
The study of the economy as a whole, 
analyzing aggregate economic indicators like 
national income, unemployment rates, 
inflation, and economic growth.
Macroeconomic vs. Microeconomic 
Approach
M i c r o e c o n o m i c s studies individual economic 
units (e.g., households, firms), while 
m a c r o e c o n o m i c s looks at the economy in 
total, including factors like GDP and inflation.
The Context of the 
Present Book
The Purpose of This Textbook
This textbook aims to introduce the foundational 
principles of macroeconomics while providing 
tools for analyzing real-world economic scenarios. 
It covers various macroeconomic theories and 
policies that shape national economies.
The Context of the Present 
Book
Key Players in the Economy
Households: Consumers that provide labor and 
capital in exchange for income.
Firms: Organizations that produce goods and 
services using the factors of production (labor, 
capital).
Government: Sets economic policies, regulates 
markets, and provides public goods.
External Sector: Includes foreign trade and 
investment, influencing domestic markets.
Historical Foundations of 
Macroeconomics
Adam Smith (1776)
Known as the "father of 
economics," Smith 
introduced the idea of 
the invisible hand, 
where individuals 
pursuing their self-
interest unintentionally 
promote the public 
good. He argued that 
free markets could 
naturally regulate 
themselves.
John Maynard 
Keynes (1936)
Keynes Macro -
economic Theory. 
Keynes' General 
Theory during the 
Great Depression 
challenged the 
classical view, arguing 
government 
intervention is needed 
when markets fail to 
achieve full 
employment.