Government of Thrones
Microeconomics vs. MacroeconomicsMicroeconomics is generally the study of individuals and business decisions; macroeconomics looks at higher up country and government decisions.MicroeconomicsMicroeconomics is the study of decisions that people and businesses make regarding resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize its production and capacity so it could lower prices and better compete in its industry.A government policy has microeconomic effects whenever its implementation alters the inputs and incentives for individual economic decisions. These changes come in many forms, including tax policy, fiscal policy, regulations and tariffs. These policies manipulate the costs and benefits.Sometimes the impacts of government policy are intentional. The government might provide a subsidy to farmers to make their businesses more profitable and encourage farm production. Conversely, the government might put a tax on cigarettes and alcohol to discourage behavior that it doesn't approve of. Other impacts are unintentional.When the U.S. government propped up wages during the Great Depression, for example, it unintentionally made it unprofitable for individual firms to hire extra employees. The nature of these causes can be understood by identifying the forces behind microeconomic ernments are financed through taxes, which must be taken from private actors. When this happens, individuals and businesses must either spend less income or work and produce an additional amount to offset the impact of the ernments can also alter markets when they decide to spend money. Any individuals or businesses that receive government funds receive, in effect, a wealth transfer from every other taxpayer. When the government spends $1 million purchasing computers, it bids up the price of computers in the short run. This crowds out other individuals who are subsequently priced out of the market. This crowding out becomes even more disruptive when the government directly provides services and employs ernments either change the quantity of a good available (supply) or the amount of funds that can be directed toward those goods (demand). Governments can also make some forms of trade illegal or make them illegal under certain contexts. All of these impact the choices that microeconomic actors face and change their decision-making processes.MacroeconomicsMacroeconomics, on the other hand, is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy-wide phenomena, such as Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by unemployment rate.John Maynard Keynes is often credited with founding macroeconomics. He started the use of monetary totals to study broad phenomena; some economists reject his theory and many of those who use it disagree about how to interpret it.Needless to say, macroeconomy is very complicated and there are many factors that influence it. These factors are analyzed with various economic indicators that tell us about the overall health of the economy.Macroeconomists try to forecast economic conditions to help consumers, firms and governments make better decisions.? Consumers want to know how easy it will be to find work, how much it will cost to buy goods and services in the market, or how much it may cost to borrow money.? Businesses use macroeconomic analysis to determine whether expanding production will be welcomed by the market. Will consumers have enough money to buy the products, or will the products sit on shelves and collect dust?? Governments turn to the macroeconomy when budgeting spending, creating taxes, deciding on interest rates and making policy decisions.While these two studies of economics appear to be different, they are actually interdependent and complement one another since there are many overlapping issues between the two fields. For example, increased inflation (macro effect) would cause the price of raw materials to increase for companies and in turn affect the end product's price charged to the public.The bottom line is that microeconomics takes a bottoms-up approach to analyzing the economy while macroeconomics takes a top-down approach. Microeconomics tries to understand human choices and resource allocation, and macroeconomics tries to answer such questions as "What should the rate of inflation be?" or "What stimulates economic growth?"Regardless, both micro- and macroeconomics provide fundamental tools for any finance professional and should be studied together in order to fully understand how companies operate and earn revenues and thus, how an entire economy is managed and sustained. ................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- mortgage calculator government of canada
- government of canada first time home buyer
- government of jamaica vacancies
- government of punjab pakistan
- government of jamaica jobs
- government of punjab pakistan website
- student loans government of saskatchewan
- government of saskatchewan student loans
- government of canada retirement calculator
- government of jamaica website
- government of seychelles website
- government of the people quote