What are macro economic factors?
What Is a Macroeconomic Factor? A macroeconomic factor is an influential fiscal, natural, or geopolitical event that broadly affects a regional or national economy. Macroeconomic factors tend to impact wide swaths of populations, rather than just a few select individuals.
What are some of the factors that affect the money supply?
Thus the money supply is determined by high-powered money, the currency ratio, the required reserve ratio and the market rate of interest and the bank rate. The monetary base or high-powered money is directly controllable by the central bank.
What are the 5 macroeconomic factors?
There are 5 common terms in macroeconomics that are considered in aggregate: output, gross domestic product ( GDP ), production, income, and expenditures.
Is money supply a macroeconomic factor?
In other words, the changes in the size of money supply have a number of implications on the macroeconomics variables like inflation and economic growth. Ceteris Paribus, inflation has a linear relationship with money supply and a negative relation with growth in real income or output (Nyong, 2001).
What is macroeconomics with example?
Macroeconomics (from the Greek prefix makro- meaning “large” + economics) is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and government spending to regulate an economy’s growth and stability.
What are macro and micro economic factors?
Microeconomic factors such as supply and demand, taxes and regulations, and macroeconomic factors such as gross domestic product (GDP) growth, inflation, and interest rates, have a significant influence on different sectors of the economy and hence on your investment portfolio.
How does economic situation affect the supply of money?
Relationship Between GDP and the Money Supply In general, when the GDP growth rate shows rising economic productivity, the value of money in circulation increases. This is because each unit of currency can subsequently be exchanged for more valuable goods and services.
How does macroeconomics affect the economy?
Positive macroeconomic variables stimulate economic growth and create financial stability within an economy. They involve an increased demand for products and services. Positive macroeconomic factors inject more cash into an economy and encourage industries to expand.
What do you mean by supply of money explain its factors?
The money supply (M) consists of deposits of commercial banks (D) and currency (C) held by the public. Thus the supply of money, M=D+C. High-powered money (H) (or monetary base) consists of currency held by the public (C) plus required reserves (RR) and excess reserves of commercial banks.
What means macroeconomics?
Definition: 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.
What is Macroeconomics give example?
What is importance of money supply in macroeconomics?
Importance of Money Supply: Growth of money supply is an important factor not only for acceleration of the process of economic development but also for the achievement of price stability in the economy. There must be controlled expansion of money supply if the objective of development with stability is to be achieved.