For the beginning; the definition of Economy, Macro and Microeconomy is essential to inform all the followers of our Website. Economy can be shortly defined as a systematic review of the use of scarce resource choices. The choices can be made by individuals, firms or countries. One of the its subspecialties, Macroeconomics, is dealing with happenings in a nation’s economy by its dictionary meaning. As we come to Microeconomics, the area is shortened to foundations in an economy, taking unit by unit like firms, workers and families. Today we are going to cover these two components and give some information a little bit about them.
What is Macroeconomy All About?
Study of the financial performance framework and efficiency of domestic economies and public policies, or shortly Macroeconomy is dealing with a nation’s economy. Macroeconomists are studying on different kind of areas, such as:
- Long-run economic growth: the change of living standards in a long term
- Business cycles: the ups and downs in a nation’s economy, usually determined by years in short runs
- Unemployment: the rate of the people who do not own a job but seeking for get one
Unemployment rate = Unemployment / Labor Force
- Inflation: the change in values of goods, evaluated by foundations of government or specialized on economy (like TÜİK) If the prices are decreasing, it’s called deflation
- The international economy: the studies about interactions between different countries’ economies. Divides different countries into two economic models: Closed and Opened economies. Closed economies are doesn’t do actions with other countries and opened economies are trading goods with other countries.
- Macroeconomic policy: Set of rules to guide decision making for more desired outcomes on issues of interest
What is Microeconomics All About?
Microeconomics focuses on the behavior of individual economic agents, such as homes, employees and companies. The questions that Microeconomist try to answer are: What determines how families and people are spending their expenses? What mix of products and facilities will best suit their requirements and wants, considering the money they need to invest? How do individuals assess whether to operate, and if so, whether to operate complete or part-time? How do individuals define how much to save for the future, or whether to afford to invest beyond their present goals? What determines the products and how many will a company generate and distribute? What determines what rates a company will pay? What determines how a company will manufacture its products? What determines how many employees it is going to employ? How is a company going to fund its company? When will a company decide to grow, decrease or even near?