Microeconomics | Macroeconomics
The study of economics is typically divided into two parts: macroeconomics and microeconomics.
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| Macroeconomics VS Microeconomics |
What is Microeconomics?
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources and prices of goods and services.
What is Macroeconomics?
Macroeconomics studies the association between various countries regarding how the policies of one nation have an upshot on the other. It circumscribes within its scope, analysing the success and failure of government strategies.
- Macroeconomics focuses on the behavior of an entire economy,the "big picture", In macroeconomics we worry about such national goals as full employment, control of inflation, and economic growth, Balance of Payments, worrying about the well being or behavior of specific individuals or groups.
The essential concern of macroeconomics is understand and improve the performance of the economy as a whole.
- Microeconomics is concerned with the details of this "big picture", In microeconomics we focus on the individuals, firms, and government agencies that actually comprise the larger economy. Out interest here is in the behavior of individual economic actors.
What are their goals?
How can they best achieve these goals with their limited resources?
How will they respond to various incentives and opportunities?
A primary concern of macroeconomics, for example, is to determine the impact of aggregate consumer spending in total output, employment, and prices. Very little attention is devoted to the actual of consumer spending or its determinants.
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| Economics |
Microeconomics, on the other hand, focuses on the specific expenditure decision of individual consumers, and the forces ( tastes, prices, and incomes), the influence those decisions.
The distinction between macro- and microeconomics is a matter of convenience. In reality, macroeconomics outcomes depend on micro behavior, and micro behavior is affected by macro outcomes.
One cannot fully under-stand how an economy work until one understands how all the participants behave and why they behave as they do.
But just as you can drive a car without knowing how its engine is constructed, you can observe how an economy runs without completely disassembling it. In macroeconomics we observe that the car goes faster when the accelerator is depressed and that it slows when the brake is applied.
That is all we need to know in most situations. There are times, however, when the car breaks down.when it does,we have to know something more about how the pedals work. the pedals work. The leads us into micro studies.
How does each part work?
Which ones can be or should be fixed?
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