The subject matter of Economics is on explaining the world. That is, ways people behave, way in which most markets work and the way governments work in relation to the administration of scarce resources…
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The scope of Economics revolves around many things some of which are factor pricing, product pricing, income, demand, economic growth and welfare. The study of economics attempts to gain a glimmer of light on how and why the wealth of the world gets produced, distributed and finally consumed. It not only examines the local market, but it also everything at the global levels. Class structures and wealth distribution, the role of government and politicians, demand and supply of products and services, division of labor and other countless factors are all encompassed in economics. It attempts to explain the production system in the world and why they function the way they do (ILO, 2013). Arguably, one of the most inalienable factors in the definition of the subject matter of economics is division of labor. According to International Labour Organization, the current distribution of labor is a positive factor contributing to the economic climate today. Labor gets distributed not only between companies and countries but also within a company. Wage disparity occurs between the laborers and capitalists, a condition that results from division of labor. The laborers will thus have low buying powers in comparison to the business owners. This means that their economic standard will always be lower than that of capitalists. Division of labor is thus effective as a clear vision of the subject matter of economics. Economics study is not effective if we fail to discuss the two main divisions of economics namely macroeconomics and microeconomics. Macroeconomics is a branch of economics which looks into, the behavior, decision-making and performance of an economy as a whole and not as individual markets. The World Trade Organization makes use of GDP, unemployment and price indices in a bid to understand how the economy functions. In macro economics, models get used to explain the relationship between such factors like national income, output, consumption, unemployment, savings, inflation and international finance (IMF, 2013). Macro economics is such a broad field of study and there are two main areas of research considered emblematic of the discipline. This is the attempt to give an account of the causes and consequences of short-run fluctuations in the national income (the business cycle) and an attempt to understand the determinants of a long-run economic growth. In most cases, macroeconomic models and their focuses get utilized by governments to assist them in their development and evaluation of economic policies. Some of these policies include the monetary policies, fiscal policies and comparison policy. Further, macroeconomics encompasses output and income, unemployment and inflation & deflation as the three major variables of its research (IMF, 2013). Thus, the subject matter of macroeconomics revolves around the three aspects of national aggregates; stability, growth and stability of the community at large. Most variables of macroeconomics get related with employment, inflation, unemployment issues and import and export matters of a nation or between nations. Microeconomics is the branch of economics that analyzes market behaviors at a level of individual consumers and firm. This it does in the attempt to understand the underlying decision-making processes of firms and households. It majorly concerns itself with the interaction between individual buyers and sellers (IMF, 2013). In particular, macro economics mainly focuses on supply and demand patterns, as well as price and output determination at these individual markets. The strength of microeconomics crops from the simplicity of its underlying structure and its closeness in contact with the
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The present situation is APE< GDP = ASF. There would a response from the producers by decreasing unemployment, reduction in prices and output. This will make the ASF line to move rightwards and the GDP and APE line to move leftwards. The economy attains a position which is shown in the figure.
The comparison is carried out between these two factors. In the ratio of Ann’s to peter’s case, Ann has a lower utility function than peter because peter is on medication. The amounts that peter will spend on medication makes him more vulnerable in spending.
The public’s demand for the two company’s products and services generated projected gains. Before the merger, several financial analysts opined that the proposed merger would be very successful (Baumol, 2011). Many quarters predicted the business after the merger will be rosy.
The demand side of the market comprises of the owner and the renter while the supply side comprises of the developer as well as the renovator. In order to analyze the demand and the supply factors a number of modifications need to be implemented in the microeconomic assumptions.
One of the significant areas of economics especially is macroeconomics which is a branch of economics that deals with the problems of a particular country or economic region comprised of several economic agents acting with their individual economic behaviors and the evaluation of the policies taken by the government of these countries in order to tackle those problems (Adams, 2002, p.
vaccinations against infectious diseases). Briefly suggest how government might intervene to correct this under-provision? 5 (C) The Consumer Price Index (CPI) is the official measure of inflation in the United Kingdom. Why might CPI not be an accurate measure of the costs of living for any given individual consumer?
Macro & Micro economics Introduction China is one of the fastest growing economies in the world. Being the second-largest economy, China has shown tremendous growth in the last three decades. According to the estimate of 2012, China’s GDP is US $12.38 trillion (CIA, 2013).
Macro & Micro economics Introduction The Chinese economy has been growing at a significantly high rate since the last three decades. It is the second-largest economy in the world and is one among the fastest growing economies (Chiang and Standing, 2013). Last year (2012), in the fourth quarter, the Chinese economy grew at the rate of 7.9% (BBC, 2013).
Macro & Micro economics Contents Contents 2 Introduction 3 Causes and Mechanisms of the collapse of the world trade 3 Current Trade Policies in Response to the Global Recessions 7 Policy responses on negative impact on the trade balance were implemented in the UK 8 Effectiveness of the EU trade policies in the long run 9 Conclusion 11 References 12 Introduction The Great Depression was one of the most severe economic downturn that the world faced during the twentieth century in the pre-World War era.
Micro and macro economic on us trade
This paper defines in detail what Macroeconomics and Microeconomics are about and what their impacts on the economy of a country are. We have taken into account the impact the two kinds of economies create on U.S. trade and why is it important for the survival of the nation.
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