Issues in Macroeconomics
1. Macroeconomics versus Microeconomics

Macroeconomics is the study of the economy at large. How does the U.S. economy, the British economy, the European economy, the Japanese economy, or even the world economy work as a whole? Macroeconomists asks questions such as, Why has the Japanese economy grown so swiftly since 1945 and during that same period the U.S. economy has grown relatively slowly? They ask why many Americans lost their jobs in 2000 and had a hard time finding new ones.

Macroeconomics is the study of a nation's economy in relation to itself and other nations.

In microeconomics, by contrast, you'll recall, the focus is on individual buyers and sellers and on individual markets, from the local hot-dog stand to the market for Manhattan real estate. A single market is small relative to all the markets that make up the economy. Methodologically speaking, our argumentative style will necessarily change. For example, in microeconomics, our good friend the ceteris paribus assumption saved us from thinking about how the rest of the whole might affect that small, single market, such as the restaurant owned by Maria's mother. Not so in macroeconomics, where all markets are in flux.