Firstly, let me start by explaining the meaning of macroeconomic and microeconomic. Macroeconomics is the division of economics which help us to study the behavior and performance of an economy; it also helps us to focus on the aggregate changes in the economy for example Gross Domestic Product (GDP), inflation and unemployment. Macroeconomics focused on the determinants of total national output, it studies the national income not only the household or individual income but the overall price level; it also analyze the demand of total employment in the economy not only the individual. Secondly Microeconomics, basically microeconomics is the opposite of macroeconomic. Microeconomics is the study of individuals, households and firms behaviour
This is primarily a tool at the disposal of the central bank of a country which uses different tools to manage the macro economic variables of a country to keep the economy stable or to stabilize it in situations of fluctuations. Monetary policy can be expansionary or contractionary depending on whether the money supply is being increased or decreased in the system so as to affect economic growth, inflation, exchange rates with other currencies and
The fast inventory turnover, marketer finance, low operational prices, and self service facilities enabled Costco to control at a considerably lower profit margin and to expire those savings to members through lower costs and better quality product. By charging members a paid fee, that supplemented overall profitableness, it provided shareholders with an appropriate
Microeconomics is a smaller window compared to macroeconomics; microeconomics focuses on things surrounding individual businesses and consumers whereas macroeconomics focuses on the bigger picture, or the whole aggregate. Microeconomics is the study of choices that individuals and businesses make, the way those choices interact in markets, and the influence of governments. Different studies within microeconomics include what to produce and how much to charge when it comes to an individual firm. When looking at a household microeconomics would be the study of what and how much of it to buy. Other areas of study for microeconomics would be poverty, income rate on jobs, consumption patterns, and distribution of output; overall microeconomics is
The prices of the needs of human were all under control by the government. It is better than the market economy system which will lead to the citizens unable to pay for the needs. In command economy system, there is no decision made by the citizens. Therefore they will lack of motivation to do anything because everyone get the same wages. The economic plans are implemented through laws and regulations and directives.
This cost will then be absorbed by firms or more likely be passed on to consumers in the form of higher prices. This is an example of cost-push inflation. Such inflation erodes income gains associated with minimum wages, while causing aggregate demand levels in the economy to decline (DPRU, 2008). Shadow labour markets may develop Since minimum price is set above market clearing prices, shadow markets are likely to develop. This is because at the minimum price there is a surplus of labour.
There are two components of well being- material and qualitative well being. Material aspect of it can be measured like the shift in the growth model of measuring GDP to measuring income and consumption. The distribution of wealth and income and the inequalities and disparities that exist need to be filled. Piketty believed in observation of social income and distribution of income. The other aspect is the qualitative part that looks at the non-market dimensions of development that is health, education, the pattern of public expenditure, measurement of personal work and the quality of work produced.
Demand and supply determines what products are produced and sets the prices these products are sold. The idea is that if prices get too high, then demand is low and so the market corrects itself by lowering prices. Companies have individual say concerning what product or service to provide based on their costs. The government’s participation in the economy is entirely neutral, it does not protect industry from domestic or foreign market pressures nor does it have economic interests in industry or offer subsidies to businesses or R&D (Zuckerman,
INTRODUCTION Economic growth is defined as the increased capacity of an economy to be able to produce goods and services in comparison from one period of time to another. This is figured by the genuine Gross Domestic Product (GDP) and development, and is measured by utilizing genuine terms such as “Balanced Inflation”. These terms help to remove any distorted views on the perceived outcome of inflation on the cost of merchandises produced. Likewise, Economic growth is related to the high expectations in a person’s standard of living. If the standards are high, it wouldn’t be beneficial for the economy as the working class individuals will face a lot of trouble.
2.1. Economic Policy Economic policy refers to the actions that are intended to control or influence the behaviour of the economy by governments. Such as the systems for setting levels of taxation, the money supply, government budgets and interest rates as well as the national ownership, labour market, and many other areas of government interventions into the economy. (Wikipedia, 2014) There are the three important economic policies goals that are generally accepted which are economic growth, price stability and full employment. In this report, we will mainly discuss on economic growth.