ECO 202 Notes on Chapter 2
What exactly is macroeconomics? Macroeconomics is the study of how the overall economy, or
a sizable group of economic agents, such as aggregate investment, aggregate production, and
aggregate consumption, behaves. It examines topics pertaining to both long-term growth and
short-term changes in the economy (business cycles). The decisions made by lone economic
agents, such as homes, businesses, and so on, are the focus of microeconomics. The overall
impact (big picture) of these economic agents' decisions on the economy are what
macroeconomics is concerned with.
