Introduction: In every part from our life, there's a major picture and a little picture, the macro and the micro scale. The macro takes a gander at things through a wide-point lens; the micro takes a gander at things through a restricted center lens. Microeconomics concentrates on a constrained, limitted area of economics, including the activities of individual consumers and producers. Microeconomic study uncovers how new companies have decided the intensely fruitful or unsuccessful estimating of their products and administrations in view of consumer needs and decisions, market rivalry and other money related and monetary recipes. Microeconomics likewise concentrates supply-demand ratios and its impact on customer spending and business
Interdependence with the economic policies In consideration of the aforecited fact, I can add that Micro and Macroeconomic theories are closely relates not only with each other, but also with the economic policy. Economic stability and conformity with the global competitive markets cannot be possible without coordination both of Micro and Macroeconomics. Micro-economics needs the help of Macroeconomics. For example, the sale of a firm not only depends own it price but also the total purchasing power of the commodity. The profit value of a firm depend on aggregate demand, national income and general price level.
For example, price elasticity of demand, price elasticity of supply, income elasticity of demand, and cross-price elasticity of demand. But here we are focusing on the price
The difference between comes from the scoop we are looking to the economic situation (that why micro and macro), the macro-economy is focusing on the situation and action on the individual agent when the macro-economy is focusing and the evolution and situation of the whole economy. (Taylor,T, 2016,Principles of Economics, Rice university Houston texas, ch 1.2) The micro-economics situation will influence the whole situation, because a change in the politic of a single business will have a lot of repercussions that will influence the whole situation, as much that the evolution of the whole will change the capacity of each individual agent to take some decision. For example, as microeconomic phenomena, the price of the beer that AmBev will sell in Brazil is determining the price elasticity who will be specific to the local agent who are the Brazilian population. It’s micro and very specific phenomena. But this micro-decision will affect the macroeconomic, a successful process of production and price setting will mean production efficiency, and this will influence positively the GPD, unemployment rate and inflation rate.
These two variables serve as tools for the analysis of the problem. Modern utility theory shows that, if an individual chooses among assets with uncertain earnings
The economic aspect of an organisation can be illustrated by the economic environment by investigating the business cycle such as growth, inflation, employment and international trade. The management system of Tesco has great concern about the economic environment as it is very significant to influence the entire process of the cost of the product, demand, profit and price of the product. The economic arrangement creates a great impact on the suitable allocation of the respective resources as per the suitability of the corporation. Tesco is the UK’s largest and most resourceful supermarket chain corporation on a global market. Tesco is an international brand, which can be easily understood by its expansion on the global platform.
Fundamental analysis is a process of examine the financial statement of a firm and its rivals and markets. It is concern with the overall condition of economy, and factors like interest rates, production, earnings, employment, GDP, housing, manufacturing and management. There are two approaches to carry out fundamental analysis, one is bottom up analysis and the other is top down analysis. In top-down approach the analysis begins with economic analysis by examine the various economic indicator like GDP growth rates, inflation, interest rates etc. Followed by industry and company analysis, industry analysis includes study of growth of industry, its structure, government policies, the effects of competing products etc.
Decisions that involve tradeoffs between outcomes that occur at different points in time are called intertemporal choices. Intertemporal choices are analyzed by economists using the discounted utility model which runs on the assumption that people evaluation varies on the benefits and costs resulting from a decision in the same way when the losses or gains are evaluated from an investment in the financial market, when time is taken into account exponential discounting is used because exponential discounting captures the time consistency. Discounted utility is used to determine the intertemporal choices made by the individuals and is also the tool for public policy analysis involving public good and social welfare. Also, people tend to exhibit a special type of time-inconsistent preferences that are called quasi-hyperbolic or present-biased. .
• The second step defines the price process being modelled into a network to assess the option. Here one option is used to exchange risky incomes with other. The various income streams become the alternative services that are necessary to be evaluated to formulate a flexible
Variables like relative interest rate ,term of trade ,trade balance and net capital inflow were tested using regression model ,and panel data regression model which is common effect model ,fixed effect model, and random effect model to determine the variable that effect the Exchange rate . Theory From this article that I analyse macroeconomic theories that’s discovered was Exchange rate, inflation, investment, GDP, Price level and interest rate. Exchange rate: The price of a nation’s currency in term of another currency Inflation: A condition where price of goods and services rising nonstop. Investment: Investment is an asset or item that is purchased with the hope that it will create income or appreciate in the future.