Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole, focusing on factors like inflation, unemployment, GDP growth, and government policies.
Imagine macroeconomics as a drone flying high above an entire city. It looks at big-picture indicators to understand how the overall economy is functioning.
Fiscal Policy: Government actions related to taxation and spending aimed at influencing aggregate demand in order to stabilize the economy.
Monetary Policy: Actions taken by central banks (like the Federal Reserve) to control money supply and interest rates with the goal of stabilizing prices and promoting economic growth.
Business Cycle: The recurring pattern of expansion (economic growth) followed by contraction (recession) in an economy over time.
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