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Why study macroeconomics?

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Quick Answer

The study of macroeconomics helps create an overall idea of the state of a nation's economy. As the world is shifting toward a global economy, this could be very beneficial in devising ways for stabilizing troubled economies.

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Why study macroeconomics?
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Full Answer

The study of macroeconomics takes into account many of the factors that determine not just the current financial state of a nation or region but its prospective future. By looking at gross domestic product (GDP), the effects of taxation, consumer spending and pricing and employment outlook, macroeconomists are able to determine the direction in which a country or region might be heading that might not be immediately clear to microeconomists, who only study certain aspects of the economy. Once problems are pinpointed, macroeconomists can work with microeconomists to devise a plan that ensures a nation's ongoing or future financial success.

As the world trends toward a global economy in which corporations establish international presences and countries finance each other based on the promise of shared profit, it is essential to have a clear view of a country's economic situation when assessing its credit worthiness or making a decision about whether or not to expand a business presence in that country. Historical macroeconomic data can also be used to help plan for a country's future.

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