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Describe the terminology of macroeconomics including GDP, GNP, national income business cycles, monetary policy, fiscal policy, inflation and unemployment Macroeconomics is a broad sub-field of economics that establishes the behavior, outlook and structure, collective and established decision making system of an economy at large and usually involves national economies, regional and global economies with little or no involvement of the individual markets.
Gross National Product is a determining tool in macroeconomics that measures a nation’s economy and status through international investments and residents working over-seas. GNP excludes any product values produced by foreign investors within the country. GNP is a great indicator in macroeconomics when assessing economic progress in comparison with Gross Domestic Income. (Clark & Montjoy, 2001)
Macroeconomics uses GDP to determine the value of all market products and services produced within a given boundary usually a nation in a period of one year. At every stage of production, the value of all goods is added and the economic growth established based on the previously assessed standards.
Macroeconomists explain that unemployment tends to reduce with a rising GDP rate since the output is increased and thus need for more skilled and unskilled labor force. Inflation gives an explanation on the rate at which product prices increase over time. Macroeconomists study this phenomenon through The Consumer Price Index that gives a timely price for particular products. (Blanchard, 2006)
Monetary policy allows for the evaluation of the current cash levels following an economic rise. A need to increase cash levels in a country renders opportunity for investments, higher loan lending rates and overall increased production boosting an economy. Fiscal Policy of a government would encourage a macroeconomic development if there is a decreased taxation or increased spending(Dornbusch & Fischer, 1978). Business cycles have consequences of short-run and long-run fluctuations of national income that increases or decreases income of a nation all that macroeconomics explains.

Apply the concepts of choice and opportunity costs to basic situations involving scarcity and choice Scarcity, choice and opportunity cost make the basic ideological explanation of economy and human wants. Individuals continually seek for satisfaction and the major limitation is that there is never a satisfactory approach to their needs all because of limited resources. Therefore there is need to define the available resources before planning on the best choices of wants to fulfill. All economic levels have limited resources to satisfy the ever rising demand and human wants. The limited available resources are therefore to be used in an emphatic way in order to provide the basic opportunity gratification of sustaining wants.
Scarcity is necessitated by opportunity cost and choice. It is the best alternative one comes up with when comparing item costs and the most probable cheaper yet appropriate choices. It is essential when one needs to evaluate the cost and the best available beneficial choices. Opportunity cost applies in consumer choice on a range of contradictory evaluations, possibility of production and career choices with the best outputs after venture. In situations of scarcity, an analysis of the fitness of the available choices gives an individual an alternative for competitive advantage and reduced capital costs.
For instance, a given course is offered in a University within the Town at £29000 while the same course is offered by another institution in the countryside at £3000. The fact that the course is only offered by these two institutions defines scarcity and an opportunity cost analysis should be done so as to pick the best choice on the institution to take the course from of which is that in the countryside.
Analyse and distinguish the concept of aggregate demand, aggregate supply and macroeconomic equilibrium Aggregate demand, also called Domestic Final Demand, is the summed demand for all goods and services provided in a business economy in a time-span. The demand is always referred to the GDP and it determines the volumes of goods that are purchased. It is normally represented using a Curve that defines aggregate price level and the demanded outputs.
Aggregate supply is also called Domestic Final Supply. It is the combined supply of all goods produced and services offered in a national economy at a given time. The Aggregate demand-Supply curves are used in the analysis of economic fluctuations. Aggregate Supply highlights the amount of goods that industrial firms decide to produce and their final sales while Aggregate demand show the amount of goods that individual industries and the government purchase at all levels of production The long run aggregate supply curve is usually vertical indicating a continuous supply of services as seen in fulltime employment. Changes in the economy may alter the outputs in the long run supply. The short run supply curve is diagonal indicating a linear increase in price level with the quantity of output. The Aggregate demand curve is also a diagonal that runs from top right to the left of the axes that explains increased demand with reduced supply. Fig 1 Macroeconomic equilibrium is the state when there is a balance of the amount of goods and services that are being supplied and the demand. The price when the supply of goods and demand is equal is called equilibrium price. It can be short-run price level or long-run price level. Fig 2
Concepts, tools and implementation of monetary and fiscal policies
Monetary policy is the expansion and increment of the volume of circulating money in an economy by the various instituted monetary bodies in the nation. This is an economic stabilizing practice. A developing country should control inflation in order to stabilize the exchange rates and to achieve an overall equilibrium in balance of payments and economic development promotion.(Jhingan 1997). With a revaluation of money, The significance of monetary policy also increases. Fiscal policy refers to how the actions of the authority bodies affect reception and expenditure usually measured by annual evaluations. Taxes are major impositions in a fiscal policy and are determined by the government’s spending. The long-term aim of a fiscal policy is usually to run a stable economy of which can be achieved through facilitating short-run economic fluctuations. (Fender, 2012) Monetary and Fiscal policies are usually implemented using the government and monetary bodies such as banks and other financial institutions. The executive arm is delegated the duty of taxation and implementation of new tax values.
Relevance and importance of circular flow of the economy The flow of money reflects the status of an economy and gives the government a simple search-line for areas that require formulation of policies and their measures. The significance of the fiscal policy compensation is easily determined. The relevance of the monetary policy is also easily monitored and a balance between the investments and savings of an economy. It also offers a focus on the possible ways to restore disequilibrium.

References
Clark, C., & Montjoy, R. (2001). Globalization's impact on state-local economic development policy. Huntington, N.Y.: Nova Science Publishers.
Fender, J. (2012). Monetary policy. Hoboken, N.J.: Wiley.
Friedman, B. (2000). Monetary policy. Cambridge, MA.: National Bureau of Economic Research.
Mankiw, N. (1997). Monetary policy. Chicago: University of Chicago Press.
Blanchard, O. (2006). Macroeconomics. Upper Saddle River, N.J.: Pearson Prentice Hall.
Dornbusch, R., & Fischer, S. (1978). Macroeconomics. New York: McGraw-Hill.
Mankiw, N. (2007). Macroeconomics. New York: Worth Publishers.