1)How are the components of macroeconomics related?

2)If every nation or organization the US government owes money to, forgave the debt overnight, how would the US economy be affected?

3)Would competing currencies be better for the world than the current government monopoly system? Why?

1)The various components of macroeconomic analysis are given below:

1. Determination of income and output.

2. Unemployment rate.

3. Rate of inflation.

4. Level of aggregate demand and aggregate supply.

5. Economic growth models.

6. Economic policies (monetary policy and fiscal policy).

The study of macroeconomics, therefore, deals with the aggregate economic system. All these above mentioned macroeconomic components are interrelated to each other with respect to the state of economic growth of an economy.

For instance:

The level of aggregate demand and supply are the key determinants of economic development and the level of national income, which decides the growth rate of an economy.

2)If every nation or organization, the US government owes money to, forgave the debt overnight then this will be beneficial for the US economy. The trade deficit of the economy will be zero. The gross domestic product of the country will increase. The US economy can use the money to make investments or increase the expenditure to provide new opportunities to its citizens. The US economy can help the poor people by providing social welfare schemes or programs. The bilateral and the political relations of the US economy will increase with the nations that have cancelled the debt. However, it is not possible in the real world as the US dollar is desirable by every economy for their growth.

3)No, the competing currencies would not be better for the world than the current government monopoly system because this would create complexity in the economy and the decision making the authority of a country would be finished. The monetary authority of the country will not be able to function efficiently. The cost of the transactions and the exchange will increase due to the inefficient system.