Macroeconomics occupies a significant place in economic analysis and has a lot of theoretical and practical importance.
The importance of macro-economics can be understood from the following points:
i) POLICY FORMULATION:
Macroeconomics plays a very important role in formulating economic policies. Since Government intervention in economic affairs is indispensable in the present economic scenario, the knowledge of aggregates is of great importance in the framing as well as the implementation of economic policies of the nation.
ii) BASIS FOR MICROSTUDY:
Macroeconomics provides the basis for microeconomic analysis as the study of aggregates helps to understand and verify the behaviours of individual units.
iii) MULTI-DIMENSIONAL STUDY:
Macroeconomics has a very wide scope and covers multi-dimensional aspects like population, employment, income, production, distribution, consumption, inflation, etc.
This is very helpful in controlling fluctuations in these factors.
vi) NATIONAL INCOME:
Macroeconomics studies national income accounting which helps to understand the distribution of income among different groups of people. It is also instrumental in forecasting the level of economic activity.
v) SPECIAL GROWTH MODELS:
Macroeconomics has been useful in developing special growth models. These growth models are applied for economic development because the economics of growth is, in essence, the study of macroeconomics.
vi) MONETARY PROBLEMS:
Macroeconomics has special significance in studying monetary problems that adversely affect the economy.
In fact, macroeconomics focuses on the problems of inflation and deflation and their solution by adopting monetary, fiscal and direct control measures.