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Macroeconomics is the study of the overall economy, the three economic agents within this model are the government, firms and households. Macroeconomics studies the links between these agents, analysing how the decisions they make affect the whole economy as well as the individual agents.
Due to this myriad of interlinking topics and the wide range of effects a policy can have, the pages on this site may appear confusing. We have given each category within the umbrella of macroeconomics its own page, and have tried to explain as much about each category as possible, this includes subjects within it.
Each page has its own 'Required Knowledge:' topic, we advise you to read these pages before attempting a subject to ensure that you will understand it. If two subjects have Required Knowledge as each other then we would recommend that you read them in conjuction, so that you understand perfectly both subjects. The reason we have done this, is because the two subjects are inextricably linked. For example, before reading Demand Side Policies we advise you to have read Inflation, but to read Inflation we recommend that you read Demand Side Policies; to overcome this, read both subjects together, referring back to one another to understand the intricate links that Demand Side Policies can have on Inflation, and how Inflation affects the decisions made with Demand Side Policies.
If you already have a fair grasp of macroeconomics and just want to research a single topic, or refresh your memory then you can view the Macroeconomic Glossary, where we try to explain difficult concepts on one page. You might also find it useful to view the Site Index, try searching for the subject which you wish to study up on.
Like this whole website, the Macroeconomic section is constantly being revised and updated with even more knowledge! To help you see how relevant a page is, and to see when we last updated it, we have included a 'Last Updated on' feature on all new pages. If a page doesn't have this feature then it hasn't been edited since 2013.
We hope you enjoy studying Macroeconomics, as always, if you find yourself stuck on a concept, or don't believe we have covered a topic in enough detail, then please see our Contact Us page on ways to contact us for help and advice. Happy Studying!
Index Calculations
Index numbers are used to show relative values – a change in a variable relative to a base point in time. Index data uses a base (usually 100). Index numbers have no units.
If you wanted to calculate the percentage change from the base you would just subtract 100, e.g. Year 1 = 100, Year 3 = 110. The percentage change from year 3 to year 12 is 10%. If you were doing it from a year that doesn’t have an index of 100 then you would have to use the percentage change formula.
To calculate an index number you would use the formula
To calculate the percentage change of index values you would use the formula
If you have to variables on a graph with the same index year but not necessarily the same index value, then it is important to be careful when making comparisons. Meaningful comparisons can only be made about the percentage change of both; not actual values.
Percentage Change
To calculate percent change you would use the following formula:
Change = New - Original
Page last updated on 03/08/15
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