Micro & Macro Economics

   The field of economics is typically divided into two broad sections, microeconomics and macroeconomics. Each is meant to represent a different scope for viewing economic problems and understanding the functioning of economies.

Microeconomics

•         Microeconomics studies business decisions made on an individual level. A small business owner, for example, must consider all sorts of financial decisions in order to keep a business afloat and operating, such as the allocation of resources, and must follow the tax and state regulations created by the government. Price levels must also be determined with the help of supply and demand. A business owner must thus need to know how to appropriately compete in the business market by producing and selling the most products while keeping prices reasonably low. It is also important, in studying microeconomics, to study market failures and the circumstances that brought about the failures

  Examples of Microeconomic Issues

•  .Microeconomics focuses on problems relating to supply and demand, elasticity, consumer preferences, markets and monopolies.

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  Macroeconomics

  
  

            Macroeconomics studies economics on a national level, focusing on not just individual business practices, but entire industries and the behaviors of government economics. This enormous field of study involves two basic concepts: adjustments in national income and economic growth. The national income, debt levels, foreign trade rate, gross domestic product (or total economic spending) and unemployment rates are also all considered in the function of macroeconomics. Macroeconomics also invests considerable focus on fiscal and monetary policy. Fiscal policy enforces government taxation, spending and general revenue power. Monetary policy is defined by the monetary authority and power--such as in interest rates and supply of money--measured in order to sustain economic growth in a country
  

  Examples of Macroeconomic Issues

  • Issues studied by macroeconomics include national output, unemployment, interest rates and inflation.

  Where Macro and Micro Intersect

  • Microeconomics and macroeconomics, while working at very different levels in the economic playing field, actually complement each other and are vital partners in the economic world. This is because there are issues in which macro and micro intersect. For instance, an adjustment in inflation, which is a macro concern, would cause the alteration of prices of raw materials or products sold by small businesses.