Managerial economics

Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole. It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation. Macroeconomics analyzes all aggregate indicators and the microeconomic factors that influence the economy. Government and corporations use macroeconomic models to help in formulating of economic policies and strategies. Importance of Macroeconomics : 1. It helps to understand the functioning of a complicated modern economic system. It describes how the economy as a whole functions and how the level of national income and employment is determined on the basis of aggregate demand and aggregate supply. 2. It helps to achieve the goal of economic growth, higher level of GDP and higher level of employment. It analyses the forces which determine economic growth of a country and explains how to reach the highest state of economic growth and sustain it. 3. It hel...

Nature of Economics There is a great controversy among the economists regarding the nature of economics, whether the subject ‘economics’ is considered as science or an art. If it is a science, then either positive science or normative science. Economics as a Science : Before we start discussing whether economics is science or not, it becomes necessary to have a clear idea about science. Science is a systematic study of knowledge and fact which develops the correlation-ship between cause and effect. Science is not only the collection of facts,  in reality, all the facts must be systematically collected, classified and analyzed. There are following characteristics of any science subject, such as; (i) It is based on systematic study of knowledge or facts; (ii) It develops correlation-ship between cause and effect; iii) All the laws are universally accepted (iv) All the laws are tested and based on experiments; (v) It can make future predictions; (vi) It has a scale of measurement. On...