When you study macroeconomics, you will study how the economy as a whole operates. It differs from microeconomics, where the focus is on individual economic actors, consumers, and producers, including their economic
Macroeconomics
Behavioral Economics: Importance, Examples of Concepts
What's it: Behavioral economics is a branch of economics on how psychological factors influence and explain economic decision making. It studies the cognitive, emotional, cultural, and social effects on decisions made by economic
Total Factor Productivity: Meaning, Determinants, How to Calculate
What's it: Total factor productivity quantifies the share of economic growth not explained by increases in labor and capital when both are used together in the production process. We also often refer to it as the residual Solow model
Foreign Exchange Reserves: Composition, Importance, Impacts on Economy
What's it: Foreign exchange reserves are liquid assets denominated in foreign currency held by the central bank or government for future use. This includes reserves in hard currency (such as dollars, euros, and yen), government
Capital Account on the Balance of Payments: Concept and Components
What's it: A capital account is a part of the balance of payments in addition to the current account and financial account. It records the net proceeds from capital expenditure and income transactions. It has two main components,
Kondratieff Cycle: Meaning, Details of the Cycle and Criticism
What's it: Kondratieff cycle is a long-run economic cycle. That's according to the name of its discoverer, Nikolai D. Kondratieff, a Russian economist. He believed that such cycles were the result of and periods of technological
Gross National Product: Meaning, Importance, How to Measure
What's it: Gross national product (GNP) is the total monetary value of the products and services produced by a country's citizen, regardless of where the location of production. The production location may be in their country or outside the
Automatic Stabilizers: Examples and How They Work
What's it: Automatic stabilizers are countercyclical fiscal tools. They moderate economic fluctuations without direct government intervention. At one time, when the economy was contracting, they helped the economy to avoid further
What Is Gross Investment
Gross investment is the sum of expenditures for new capital purchases and the replacement of depreciated capital. The company buys new capital goods, such as factories and equipment, to increase its production capacity. Meanwhile, capital
What Is Gross Domestic Private Investment
Gross domestic private investment represents investment spending by the private sector. This is one component of gross domestic product (GDP) in addition to household consumption, government spending, and net exports. Investment growth
What Is Price Stability
Price stability is when the inflation rate is low and does not fluctuate in the extreme. Stability does not mean inflation is zero percent. Say, the percentage moves between 1-2%. A stable low inflation rate enables more accurate
What is Consumption Expenditures
Consumption expenditure represents spending by households. It covers purchasing three product categories: durable goods, nondurable goods, and services. Consumption accounts for the majority of gross domestic product (GDP) in several
What Is Sustainable Economic Growth
Sustainable economic growth means economic growth continues over time and does not jeopardize future generations' ability to expand productive capacity. Because productive capacity depends on the availability and quality of production
Expenditure Approach: Components, Formula, Using It To Calculating GDP
Under the expenditure approach, gross domestic product (GDP) equals the sum of all spending on final goods and services in a country during a certain period. This is one of the three approaches to calculating GDP. The other two
Income Approach: Components, Formula, Using It To Calculate GDP
Under the income approach, gross domestic product (GDP) is the sum of all income received by the owners of the factors of production. The factors of production consist of labor, capital, land, and entrepreneurship. Workers receive wages and