Characteristics Of Macroeconomics

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Microeconomics
Microeconomics is the part of economics which is concerned with single factors and the effects of individual decisions. It looks into how supply and demand interact in individual markets for goods and services. It is based on models of consumers or firms that make decisions about what to buy, sell or produce with the assumption that those decisions result in perfect market clearing where demand equals supply.
Macroeconomics
Macroeconomics is concerned with how the overall economy works. It is more difficult to understand as it describes relationships among aggregates. The field is divided into the study of national economic growth in the long run and the analysis of short run departures from equilibrium.
Its aim is to stabilise the national economy to minimise fluctuations in growth and prices by formulating policies.
It is true that the answers on many ‘big picture’ macroeconomic questions, like the causes of recessions or the determinants of growth, remain elusive. But the challenges faced by economists are no different from those encountered in medicine and public health. Health …show more content…

The crucial factor is that it does not have to be a scientific hypothesis, as a scientific hypothesis requires that it can be tested. With economics mainly macroeconomics models can be used to provide evidence for or against a specific hypothesis. However, many economic hypotheses are difficult to test as economic systems are run by governments and it would be immoral to cause economic harm to individuals and populations. If we could randomise policy decisions and then observe what happens to the economy and people’s lives, we would be able to get a precise understanding of how the economy works and how to improve policy. But the practical and ethical costs of such experiments preclude this sort of

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