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The world of macroeconomics, the study of the economy as a whole, is largely based on micro-economics, or microeconomics, which deals with the interactions within that whole. As such, in micro-economics there are two kinds of economies. First, there is the short-run economy, which is the economy that exists when the market has closed; and second, there is the long-run economy, which is the economy that exists when it opens again. The micro-economics then deals with the fact that these two types of economies interact with one another in real time.

Micro-economics was first introduced by economists Milton Friedman and Anna Schwartz, and their theory on this topic, called microeconomics, is the same as what we know now. Milton Friedman was able to describe this process in his book, Money: A Monetary Approach, where he explains that money acts like a “general public good” and it is the exchange of that good for any number of other goods, and not something that can be directly controlled. This theory is still used today as a model of how is macro and micro economics related, though it is used to describe the entire economy, including the short term and the long term.

If we look at the macroeconomics, then we find the same basic principles, although there have been a lot of theories that have been developed over time in order to explain the nature of macroeconomics, and how is micro and macro economics related. The theory of inflationary policies is still one that is used today in many places. Basically, this means that economies need to expand in size in order to keep the price level stable and to prevent deflation; in order to achieve this, there must always be an increase in the money supply, which in turn causes the market price level to increase, which in turn causes inflation.

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Another very important idea is the theory of the money supply. In the standard model, the monetary supply is usually equal to the value of the currency in circulation; though, because there are many different situations, and no absolute currency that can be measured, this value varies throughout the course of time, depending on many factors, including interest rates, the state of the economy, and many other things.

While the basics of the standard model remain the same, the models for macro economics have developed significantly over time. These include the theory of unemployment and employment effects, as well as unemployment-induced price rises and inflation; changes in interest rates and inflation, as well as they affect the amount of money in circulation and the money supply itself; changes in the quantity of goods available, and price levels due to fluctuations in the quantity of money in the market; and in what can be considered the output of the economy.

In addition to these, there are also models that deal with the consumption of goods and services and their prices as well, and these are often referred to as micro and macro economics. When considering how is micro and macro economics related, one of the important concepts is that, as previously mentioned, these are closely related, and one cannot exist without the other; and when comparing them, there are many points of convergence, so that a model can be made which covers all of the major aspects, and then only one model will show the relationship between both.

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