Macroeconomics focuses on the following units in an aggregative manner
Answer Details
Macroeconomics focuses on the units of an economy in an aggregative manner, meaning it looks at the economy as a whole rather than focusing on individual units. This helps us understand how different parts of the economy interact and influence each other. The correct option is **household, firms, government, corporate sector, and external sector**. Macroeconomics analyzes the behavior and interactions of these units to understand the overall performance of the economy. 1. **Households**: These are the individual consumers who make up the economy. They play a vital role in determining the consumption and saving patterns that influence economic activities. 2. **Firms**: Firms are the businesses that produce goods and services in the economy. Macroeconomics looks at their investment decisions, production levels, and employment to understand the overall economic growth and productivity. 3. **Government**: The government plays a significant role in macroeconomics. It collects taxes, provides public goods and services, regulates the economy, and influences economic policies such as fiscal and monetary measures to stabilize the economy.
4. **External sector**: The external sector represents international trade and the flow of goods, services, and capital across borders. Macroeconomics considers factors like exports, imports, exchange rates, and foreign investment to understand the impact of global interactions on the economy. By examining these units in an aggregative manner, macroeconomics helps us understand how changes in one sector affect the others and ultimately impact the overall performance of the economy.