![]() The two key elements of this economic science are the interaction between supply and demand and scarcity of goods. Therefore, microeconomics is the study of markets. These interactions, which mainly are buying and selling goods, occur in markets. Microeconomics deals with the economic interactions of a specific person, a single entity, or a company. what determines long-run economic growth.ĭefine Microeconomics, Identify the main users of microeconomics.the causes and consequences of short-run fluctuations in national income, otherwise known as the business cycle, and.On the national level, macroeconomists hope that their models help address two key areas of research: These models rely on aggregated economic indicators such as GDP, unemployment, and price indices. To achieve these goals, macroeconomists develop models that explain the relationship between factors such as national income, output, consumption, unemployment, inflation, savings, investment and international trade. Increasing Productivity over time throughout the national economy.This does not, however, mean that income and wealth are the same for everyone. Equitable distribution of income and wealth among the economy’s participants. By the end of this section, you will be able to: Describe microeconomics Describe macroeconomics Contrast monetary policy and fiscal policy Economics 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.External balance occurs when exports roughly equal imports over the long run.Price stability is not necessarily zero inflation steady levels of low-to-moderate inflation is often regarded as ideal. Price stability occurs when prices remain largely stable and there is not rapid inflation or deflation.As a result, full employment does not mean zero unemployment. Most economists believe that there will always be a certain amount of frictional, seasonal and structural unemployment (referred to as the natural rate of unemployment). Full employment occurs when those who are able and willing to have a job can get one.Sustainability occurs when an economy achieves a rate of growth which allows an increase in living standards without undue structural and environmental difficulties.While there are variations between the objectives of different national and international entities, most follow the ones detailed below:Ĭirculation in Macroeconomics: Macroeconomics studies the performance of national or global economies and the interaction of certain entities at the these level. Economists hope that this growth translates to increased utility and an improved standard of living for the economy’s participants. For most macroeconomists, the purpose of this discipline is to maximize national income and provide national economic growth. ![]() ![]() Macroeconomists focus on the national, regional, and global scales. Macroeconomics is the study of the performance, structure, behavior and decision-making of an economy as a whole. \)ĭefine macroeconomics and identify the main users of macroeconomics ![]()
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