If you like (tedious) math and/or it comes very easy Micro is a good class for self study. Americans tend to expect that government can fix whatever economic problems we encounter, but to what extent is that expectation realistic? These are just some of the issues that we will explore in the macroeconomic chapters of this book.The math in both classes is not very sophisticated, but everything in micro can be converted to a mathematical situation. For the United States, this is the Congress and the executive branch, which originates the federal budget. A nation's legislative body determines fiscal policy, which involves government spending and taxes. For the United States, this is the Federal Reserve.
How can we use government macroeconomic policy to pursue these goals? A nation's central bank conducts monetary policy, which involves policies that affect bank lending, interest rates, and financial capital markets. We can determine an economy's macroeconomic health by examining a number of goals: growth in the standard of living, low unemployment, and low inflation, to name the most important. What determines the level of economic activity in a society? In other words, what determines how many goods and services a nation actually produces? What determines how many jobs are available in an economy? What determines a nation’s standard of living? What causes the economy to speed up or slow down? What causes firms to hire more workers or to lay them off? Finally, what causes the economy to grow over the long term? In turn, macroeconomy's performance ultimately depends on the microeconomic decisions that individual households and businesses make. For example, firms will be more likely to hire workers if the overall economy is growing. In economics, the micro decisions of individual businesses are influenced by whether the macroeconomy is healthy. In studying a lake, the micro insights about particular plants and animals help to understand the overall food chain, while the macro insights about the overall food chain help to explain the environment in which individual plants and animals live. Whether you are scrutinizing lakes or economics, the micro and the macro insights should blend with each other. In a similar way, both microeconomics and macroeconomics study the same economy, but each has a different viewpoint. Both approaches are useful, and both examine the same lake, but the viewpoints are different. Another person might take an overall view and instead consider the lake's ecosystem from top to bottom what eats what, how the system stays in a rough balance, and what environmental stresses affect this balance.
One person who sets out to study the lake might focus on specific topics: certain kinds of algae or plant life the characteristics of particular fish or snails or the trees surrounding the lake. To understand why both microeconomic and macroeconomic perspectives are useful, consider the problem of studying a biological ecosystem like a lake. Microeconomics and macroeconomics are not separate subjects, but rather complementary perspectives on the overall subject of the economy. It focuses on broad issues such as growth of production, the number of unemployed people, the inflationary increase in prices, government deficits, and levels of exports and imports. Macroeconomics looks at the economy as a whole. We can divide that ground into two parts: Microeconomics focuses on the actions of individual agents within the economy, like households, workers, and businesses. It should be clear by now that economics covers considerable ground. It looks at how government spending, taxes, and regulations affect decisions about production and consumption.
Micro vs macro economics how to#
It probes questions like how to tell when big businesses or big labor unions are operating in a way that benefits society as a whole and when they are operating in a way that benefits their owners or members at the expense of others. It explores the question of how investing in education helps to develop workers’ skills. Economics acknowledges that production of useful goods and services can create problems of environmental pollution. Microeconomics and Macroeconomics OverviewĮconomics is concerned with the well-being of all people, including those with jobs and those without jobs, as well as those with high incomes and those with low incomes. How To Organize Economies: An Overview of Economic Systems.How Economists Use Theories and Models to Understand Economic Issues.What Is Economics, and Why Is It Important?.The Use of Mathematics in Principles of Economics.Exchange Rates and International Capital Flows.The Aggregate Demand/Aggregate Supply Model.The International Trade and Capital Flows.
0 kommentar(er)
