The difference between Microeconomics with macro economic

The difference between Microeconomics with macro economic

Talk about economics is endless indeed. However, no bored it felt discussing each branch or part in it, because it is so close to our daily lives. Call it financial, management, marketing, market mechanisms, and others. Of the large number of branches of Economics, there are two that are not less interesting to learn, i.e. the micro and macro economics.

Microeconomics is a branch of economics that studies about economic variables in scope is smaller, like corporate, consumer behavior, supply and demand, production, price, and more. While studying the macroeconomic variables of the economy overall (aggregate), such as the amount of money in circulation, national income, unemployment and employment, inflation, balance of payments and economic growth.

Good macro or micro-economies critical to measure and analyze the level of economic growth of the community in the sphere of small and even international in scope. Both have an affinity for each other. However, in contrast with microeconomics macroeconomics. Here is the difference between the two things you should know.

Aspect Analysis

From the use of the term macro-micro already have difference in the coverage or scope of the study. Microeconomics examines the economic variables within the scope of a smaller or narrower. Instead, the study of the macroeconomic variables of the economy in a broader scope.

Microeconomics is focused on aspects of analysis or economic variables such as production theory, theory of price, supply and demand, elasticity, analysis of costs and benefits, market models, industry, consumer behavior, market mechanisms, and other so on.

As for the variables into aspects of macro economic analysis in covering investment, national income, unemployment and employment, inflation, monetary, balance of payments, and more.

The Basic Concept

No doubt that the economics have concepts and variables that are so widespread, even though it's been divided in two branches of the micro and macro economics. Of the variables studied in microeconomics as well as macros, each have a basic concept that became the point of difference between the two.

Microeconomics the focus on three basic concepts of theory, to wit:

• The theory of production

The whereabouts of the goods and services into the core of the sari in economic activity, primarily at the micro-scope. The goods and services of course does not appear suddenly but must be produced. Therefore required an understanding of theories related to production quantities and factors of production such as labor, raw materials, production costs, and so on.

• The theory of price

Price plays an important role in determining the value of an item or service. In addition, prices are also easing economic transactions in the process. The price is closely related to the interaction between demand (demand) and supply (supply). So, the determination of the price of an item or service is affected by the level of consumer demand and supply by manufacturers against goods or services. Therefore, the prices could be volatile.

• The theory of distribution

Behind the production of goods and services, there is capital for the procurement of raw materials and more. Not only that, there is also a workforce which should get a reward. Well, the theory of distribution of stress on the discussion surrounding such aspects. The distribution also intended as part of marketing activities (marketing) or distribution of goods or services from the manufacturer to the consumer. In this process shows up the distribution chain that involves the role of distributors, wholesalers, and retail as well.

While the basic concept that became the focus of discussion in macroeconomics, includes:

• The output (Output) and income (Income)

The output and income in the macro economy is certainly not within the scope of the company, but nationwide. The output includes the estimation of the total value of national production as a whole. With regard to revenue total national production sales results. So output often becomes a reflection of income, and vice versa.

The size of the output in the macro is the gross domestic product (GDP). High low GDP a country influenced by technological advances, capital accumulation, and the quality of human resources. If a country is able to adopt advanced technology, have high capital accumulation, and the level of education which shows the quality of the human resource is high, it will have a higher GDP. This is true vice versa.

• Unemployment

Recognized or is not a problem of unemployment or job opportunities become crucial problem faced by a country. Increasingly lack work opportunities are available, resulting in high rates of unemployment in the country.

What to do with the macro economy? Of course it has to do. If the unemployment rate is high, then the burden the country is getting heavier and slower economic growth because of the national production is low. In addition, unemployment also have an impact on the level of purchasing power is low so that the resulting slack of a country's economy.

• Inflation and Deflation

Inflation and deflation are associated with monetary. Inflation is the general rise in price, while deflation the opposite, namely a decrease in price. Price changes are so drastic either inflation or deflation risk in the wake of the country's economy as a whole. Therefore, it is important to stabilize the price level by issuing monetary policy such as the control of the money supply, raising interest rates, or more.