Introduction toMacroeconomic

s

Principles of Macroeconomics

Y=C+I+G+(X-M) Consumption Investment Government Spending & Macroeconomics

Consumption (C)

The direct and final use of goods and services in the satisfaction of human wants

Importance of Consumption1. Beginning of all Economic Activities2. End of all Economic Activities3. Index of Standard of Living4. Importance in Economic Theory5. Importance for the Government6. Importance in Income and Employment

Theory

Investment (I)Types of Investment private investment or public investment induced or autonomous

Government spending (G)Government spending, revenue raising, and

borrowing, has a crucial role to play in any mixed economy.

The purpose of government expenditure To supply goods and services achieve supply-side improvements subsidize industries which may need financial

support To inject extra spending

International trade (X-M)

The Flow of Goods: Exports, Imports and Net Exports

Net Exports = Value of country’s exports – Value of country’s imports

Things related to Trade Capital Gains Free Trade Vs. Protectionism

Applications of Macroeconomics for

Managers Economic Growth & Business Inflation & Business International Trade & Business Recession & Business Financial Markets & Business

Conclusion

it is important to keep track of macroeconomic trends in order to keep the business afloat, since business decisions cannot be taken in isolation

without considering the macroeconomic environment.