How and what does macroeconomics and microeconomics study? These are simple sciences. But in order to deal with them, you should give them enough time. Now, let's get down to what macroeconomics and microeconomics are studying.
What is microeconomics?
This is the name for the part of economic theory that deals with the study of economic processes at the level of individual entities. The central problem for this science is the analysis of factors that affect pricing.
The founder of microeconomics is Alfred Marshall. He assured that the greatest interest in the framework of this science was represented by supply, factors and demand. He paid considerable attention to the laws of their formation, analysis and problems. To better understand the topic, let's look at examples of microeconomics in parallel.
What and how?
Much in microeconomics depends on demand. This is the name of the value of units purchased over a specific period of time from the prices at which the product is sold. In other words, it is a quantitative expression of products that a consumer can afford for a certain amount of time. This interpretation was given by the English economist Thomas Malthus.
This situation is affected by a fairly large number of factors, the most important of which is price. The law of demand was deduced from this: the higher the cost of a particular product, the less they buy it. Pay attention to the specifics of microeconomics! She is not interested in the situation in general, but in specific indicators of certain products, individual enterprises and households.
Thus, microeconomics studies consumer tastes, fashion for goods, incomes, prices, seasonality, expectations and structural changes in the population. Not in general, but of individual subjects of economic activity or markets. If we talk about examples of microeconomics, then we can consider the activities of a particular enterprise or household - this will be the best illustration of what this science does.
What is macroeconomics?
She is studying the functioning of the national economic sector as a whole. It arose in the period of the 30s of the last century. Its founder is John Keynes. The tasks of macroeconomics are as follows:
- Work to increase real gross domestic product.
- Provide high employment.
- Work on a stable or smoothly rising price level.
Macroeconomic models help to achieve the tasks set. Through them, the calculation of providing the population with services and goods is carried out. In addition, macroeconomic modeling allows developing strategies to achieve low unemployment and high employment. These indicators are cyclical, but the task of the government and large subjects of economic activity is to optimize them at different phases.
But the state is most interested in macroeconomics. He has at his disposal the necessary tools, thanks to which it can influence economic activity. Most attention is paid to:
- Fiscal policy. In practice, it turns around the manipulation of fiscal rates to influence the current economic situation.
- Monetary policy. It is carried out by manipulation in the financial system.
- Foreign economic policy. A series of actions aimed at increasing net exports.
- Trade policy. This includes quotas, tariffs and other regulatory instruments that may affect exports and / or imports.
- Income policy. Certain actions that are aimed at containing inflation by prescriptive methods.
Features of Macroeconomics
The specificity of this science is that it is widely used aggregation, which allows us to consider the economy as a whole. An example of the most commonly used indicators is the average price level, GDP, market interest rate, GNP, level of employment, inflation and unemployment, as well as other other characteristics of the current state of affairs.
For the convenience of studying and forecasting, in addition to modeling, methods are also widely used. So, scientific abstraction, analysis and synthesis, economic and mathematical regulation and others are most widely used. So we briefly reviewed what macroeconomics and microeconomics are studying.
