What Are Microeconomics and Macroeconomics?
Studying economics can help you understand the potential effects of economic policies on diverse industries. Economics is a tool that can help you predict macroeconomic conditions and understand the impact of those forecasts on businesses, equities, and financial markets. When you study the economy as a whole, it is called macroeconomics and when you inspect each aspect of the economy individually, it is called microeconomics. Let us now examine what they are. Microeconomics Microeconomics studies decisions made by individuals, firms, homes, workers, etc. Assume you and your family eat onion pakora every day. But you see that onion prices are increasing dramatically every day. So, you call for a family meeting and decide that you will eat onion pakoras only once in three days. While your family might not enjoy the decision, they agree since they contribute to the family finances equally. Microeconomics is the study of how specific changes in commodity prices can cause a person or corporation to change its behaviour. Macroeconomics Microeconomics, on the other hand, is concerned with parameters such as inflation, growth, inter-country trade, and unemployment. Microeconomics and macroeconomics are mutually beneficial. Microeconomics is a bottom-up method in which individuals and enterprises are examined first, then an industry, and finally the country. Macroeconomics is a top-down method in which the country is examined first, followed by the industry, and finally individuals or businesses. Macroeconomic considerations have a significant impact on stock market growth and success. What are the factors that macroeconomics looks at? It focuses more on elements such as GDP, unemployment rate, inflation, interest rate, government debt, economic cycles, and so on.