Macroeconomy is the branch of the economy that
studies the economy as a whole. That is to say, it studies a company's
global economy, it looks at how it functions on its own within
different markets and how it interacts with them.
We are now going to distinguish between the
different markets:
Market of goods and services:
where you can buy and sell all types of goods
(food, electrical household appliances, computers, bricks, etc)
and and services (professional lawyers, doctors, shows, sports
competitions, hairdressers, etc).
Money Market: where
the demand for money comes together (family interests, companies,
public organizations, etc to have money available) and the offer
of money (quantity of money in a country's Central Bank remains
in circulation).
Work Market: where
jobs are available (a country's desire to work) and demand for
work (interest of the companies to contract workers).
Among the variables that macroeconomy studies
we can also mention: employment, inflation (variation of prices),
interest rates, national income, investment, etc.
The economic policy is the Government's issue,
they decide whether or not to stretch their economy, this
happens in the most developed countries, and whether to give autonomy
to the Central Bank so that they drive the country's money.
The measures of economic policy tries to influence
the way the economy works: for example, taxes, public expenses,
monetary offer, subsidies, etc, and they try to achieve:
A high ryhthm of sustainable growth
in the medium-long term.
A low level of unemployment
Price stability
Other objectives of the economic policy, the
way in which they effect the previous goals are:
Balanced public accounts (a
large shortfall puts pressure onto the rise of interest rates,
negatively effecting investments).
Balance in payments (an economic
imbalance ends up effecting the exchange rate and as a result
exports and imports).
The measures that are used in economic policy
are grouped under the following headings:
Measures for monetary policies:
performance that effects the amount of money in the system,
which in turn has an effect on the interest rate and also in
investments. It also effects prices and the exchange rate.
Measures for fiscal policies:
performance on public expense and taxes. Public
expense is a component of GDP, whilst taxes effect the income
available for individuals, and therefore, the consumption, also
effects the new investments (companies will have more or less
resources to be able to finance them) and the prices.
Measures of offer policies:
they include different performances that the company tries to
give as an incentive and the production, tehcnological innovation,
the training of the workers, etc.
Exchange Rate: it influences
a country's commercial position (exports and imports), it also
effects the cost of goods (for example, if the exchange rate
deflates the cost of imports will rise).
Measures of foreign commerce:
customs duty, import fees, etc. It is the
same as the previous case, they will effect the country's commercial
position.
