Microeconomics studies subjects like
· Microeconomics can be defined as the study of an individual.
· Choices of individuals
E.g. consumption, investment, hours of work
· Choices of Firms
E.g. how much to produce, what price to charge
· The Determinants of Prices and Quantities in specific markets
· Market structure
· Market Competition ( what competitors are doing)
Macroeconomics studies subjects like
· Macroeconomics csn be defined as the study of aggregates or the study of economy as a whole.
· The performance of national economies, National income, Aggregate demand and supply
Long run growth and prosperity
· Why have some countries grown substantially while others remain poor?
· Short run booms and busts
· What determines unemployment and inflation
· Government policies to change performance
The firm is not an individual in most cases.
ReplyDeleteIf fiscal and monetary policy are determined by an absolute dictator, then where are the aggregates with respect to government?
These traditional definitions lack rigor. The issues these informal definitions gloss over raise serious questions about the received wisdom in the profession.