Macroeconomics: Aggregate Output & Income

Microeconomics studies the economic activity and behavior of individual economic units such as households, companies, and markets.

Microeconomics analysis examines a company’s output and income, the productivity of the labor force, the price level of its goods and services, and the actions of its management.

Macroeconomics focuses on national aggregates

Such as total investment, the amount of spending by all businesses on plant equipment; total consumption, the amount spent by all households and goods and services; the rate of change in the general level of prices; and the overall interest.

Macroeconomics evaluates a nation’s aggregate output and income in competitive and comparative advantages, the productivity of its labor force, its price level, inflation rate, and actions of its national government and the central bank.

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The objective of macroeconomic analysis is to address such fundamental questions as the following:

• What is an economy’s aggregated output?
• How is aggregated income measured?
• What factors determine the level of aggregated output/income for an economy?