Macroeconomics, as well as microeconomics, is an area of economic theory. The word “macro,” translated from Greek, means “large” (correspondingly, “micro” means “small”) and the word “economy” is “management of a household.” Thus, macroeconomics is a science dealing with the behavior of the whole economy or of its large aggregates, and at the same time, the economy is seen as a whole huge complex hierarchically-organized system, as a set of economic processes and phenomena, and their activities.

For the first time the term “macroeconomics” was used in 1933 by Ragnar Frisch, famous Norwegian scientist, economist and mathematician, one of the founders of econometrics, Nobel laureate. However, modern macroeconomic theory has its origins in the fundamental work of John Maynard Keynes, prominent British economist, representative of the Cambridge school. In 1936, Keynes published a book “The General Theory of Employment, Interest and Money,” in which he laid the foundation of macroeconomic analysis. The Keynes’ work was of such great value that a term “Keynesian revolution” appeared in economic literature and Keynesian macroeconomic model or Keynesian approach arose, as opposed to the only existed by that time traditional classical approach to the study of economic phenomena, i.e. to microeconomic analysis (the classical model).

In contrast to microeconomics, that studies the economic behavior of individual households (consumer or producer) in the individual markets, macroeconomics deals with the economy as a whole, studies the problems that are common for the entire economy, and operates on aggregate quantities such as gross domestic product, national income, aggregate demand, aggregate supply, aggregate consumption, investment, general level of prices, unemployment rate, public debt, and etc.

The main problems, macroeconomics studies, are following: economic growth and its speed, economic cycle and its causes, employment level and unemployment problems, general price level and problem of inflation, level of interest rates and monetary problems, federal budget state, problem of financing budget deficit and problem of public debt, balance of payments and exchange rate problems, problems of macroeconomic policy.

All these problems cannot be solved by microeconomic analysis, i.e. from the level of an individual consumer, individual firm or even a particular industry. It is because of this number of general or macroeconomic problems, that there is a need in the appearance of an independent branch of economic theory, self-discipline - macroeconomics.

The importance of studying macroeconomics

1)it does not simply describe macroeconomic phenomena and processes, but it reveals patterns and relationships among them, explores the cause-and-effect relations in economy;

2)knowledge of the macroeconomic relations and ties permits to evaluate the current situation in the economy and to show what should be done to improve it and, above all, what politicians should undertake, i.e. it allows to develop economic policy principles;

3) knowledge of macroeconomics makes it possible to predict how processes will develop in the future, i.e. to make predictions, to anticipate future economic problems.