Macroeconomics

Note: I will separate each posts into an easy part and a hard part, indicated by a line.

The easy definition: Economics is divided into to sections: Microeconomics and Macroeconomics. Macroeconomics deals with the sum of all Micro (small) parts. An example would be the economy of a country as a whole. While microecenomics look at only one specific product, macro refers to all products and all consumers. The keyword is aggregate, which means sum, collective, combined. Macroeconomics aggregate individual markets together.

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 The nerd definition: The four main issues of macroeconomics here is aggregate outputs (total output), price level, labor markets (such as unemployment), and foreign dealings (trade and exchange rates).

(Extended reading can be found under this sentence. You have been warned.)

Macroeconomics policies are policies that government uses to try to adjust the four factors listed above. They're generally divided into two types: Demand management policies and supply-side policy. Don't be scared by the Sesquipedalian Loquaciousness (unnecessarily long words) nature of those words. Demand management policies aim to influence the aggregate demand by adjusting interest taxes, taxes and government spendings. For example, an increase of tax on wine forces people to buy it less, and therefore less drunk. Supply-side policy boosts output (aka as aggregate supply) by increasing the abilities and willingness of firms to work (by, say, giving them a reward if they managed to donate 10% of their income to poor children.)

Of course, some people like it smoking hot....