All macro economics formulas are basically derived from economic theory. The theory that I am referring to is supply and demand theory. A lot of economists have found that supply and demand are much more important than any other factor. If you study economics then you will understand what I am talking about.
The supply and demand of money in a particular economy is very important. If the supply of money is too high then prices will go up, so the demand for money will be lower than the supply. On the other hand, if the supply of money is too low then prices will fall.
It is really very simple to calculate the supply and demand of money. All you need to do is take the interest rate and divide it by the amount of money that is currently being produced in a country. The result is the amount of money that is currently being used in the economy and what amount of money that the government needs to print up.
What all macro economics formulas do is they look at the supply and demand of money and figure out which ones are causing the economies to grow and which ones are causing them to contract. You might say that when economies are contracting they are having problems with their money supply and when they are growing they have problems with their money supply.
Another way to look at this is to see how long it takes a country to go from one economic recession to the next. If the supply of money is high, it will take longer to get back to a recession because money has to be produced in order to pay down the debt.
So there is a lot of debate over whether or not macroeconomics is right or wrong. There are those that believe that it is true and those that believe it is false. As with most things in life there are a few people who believe both, which are called advocates.
If you study macroeconomics formulas, they will tell you that when the supply of money is high it will cause an increase in the amount of money that is being produced. There will also be more money being created than the amount of money that is being used. When this happens then the economy will expand and the only way for it to contract is when there is an increase in the amount of money that is being produced.
So if we raise the money supply you will be able to create more money and therefore you will increase the amount of money that the economy creates. This is why it is called a supply and demand equation.
Of course, this does not necessarily mean that there is no hope for the economy or that there will be no economic collapse. I believe that there is an inevitable collapse. I also believe that there will be a rise in prosperity as the government prints more money . . . . . . to help the economy along and a recovery period occurs.