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Branch of economics –
As macroeconomics is related to economics, it does particularly study the aggregate behaviour of economy namely national product in total, investments in total and all exports that are in relation to international trade. It does deal with average goods and prices rather than its individual price of any specific products. There are three important variables to be concerned about macroeconomics namely;
1. Gross domestic product (GDP).
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Private sector –
It is nothing extra than households and all related businesses in an economy. Here it follows the basic structure of circular flow that is households or otherwise said private sectors, purchase services and other goods from firms in return for money. And they acquire this money from labour charges, wages, profits, interests and rents that they sell to firms. They also sell natural resources to firms in exchange for money.
There are set of two flows that prevail in a firm. One is the flow of goods and services from a firm to households and the other is, flow of factors that are needed for production from households to firms. All these include monetary transactions.
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