Principales of Economics - Research Paper Example

Download file to see previous pages On the contrary, microeconomic deals with economics concepts such as the way supply and demand relate in particular markets for goods and services. Essentially, the article clearly shows that macroeconomics focuses on matters that impact the economy as a whole (Romer, 2011). Microeconomics focuses on matters that have a direct bearing on companies and persons. Macroeconomics concepts concerns about how all the markets act together to produce the large phenomenon that is referred in economics as aggregate variables. The concept of microeconomics analyses a single market, for instance, the changes in prices of particular commodities or whether they are driven by the changes in demand and supply. In macroeconomics, the focal item of analysis is the government, in which the function it plays in contributing to the overall growth of the economic or in combating inflation. The articles points out that the macroeconomics also deals with international sphere due to the interlink between domestic markets and foreign markets through avenues like trade, investments and flow of capital. Nevertheless, the microeconomic also incorporates some global components. It is concerned with transnational components because a single market is not confined to a specific nation.
The economic concepts are outstandingly related and the two study issues that often overlap considerably (Baumol & Blinder, 2011). The areas in which the two have a common focus are inflation and the cost of living for a particular economy. Inflation is instigated by a number of factors that range from low rates of interest to expanding the supply of money. Whereas inflation looks like a solely macroeconomic field of study, it is the one crucial issue in microeconomics. Inflation leads to skyrocketing prices of services and goods and consequently causing a sedate impact for businesses and individuals. The effects of inflation have myriad impacts ...Download file to see next pagesRead More