Finance Is Based On Economics

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Finance is based on economics. Therefore, to properly understand financial markets and their behavior, you must first understand economics. Economics is the concern of production, distribution, trade and consumption of goods and services. It is the science that arises out of the relationship between limited resources and unlimited wants and needs by humans. Macroeconomics started with John Maynard Keynes, an English economist, who published a book entitled "General Theory of Employment, Interest and Money" in 1936. Keynes offered a clarification for the fallout from the Great Depression, when goods remained unsold and workers unemployed, a feat that left classical economists stumped. Keynes ' theory explained why markets may not clear. This theory evolved throughout the 20th century, diverting into several macroeconomic schools of thought known as Keynesian economics, often referred to as Keynesian theory or Keynesianism. However, in this paper, we will discuss what macroeconomics is, variables that make a healthy economy, the goals of macroeconomic policy and how the goals might conflict, the differences between fiscal policy and monetary policy, and other types of policies. According to Webster’s dictionary Macroeconomics is defined as a study of economics in terms of whole systems especially with reference to general levels of output and income, and to the interrelations among sectors of the economy. However, macroeconomics is a branch of the economics field that studies
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