Micro vs macro in the realm of economics is a simple comparison of how much output can be produced with a certain level of input. For example, let's use the classic micro view of the economy, which is really all about the flow of money and where most of the decisions are made: your local shop, the bank, and your friends and family members. But this is just the tip of the iceberg.
The micro/macro divide is even more pronounced in the area of business management. If you look at a micro level of any business, you'll see that the managers are running on a smaller scale than their macro counterparts. It's not uncommon to see small or medium sized businesses operating on a quarter size budget or even smaller. They're not managing an entire economy, they're operating within a micro economic zone. That is, they're micro-managing just part of an overall macro economic machine.
In the realm of macroeconomics, the decisions you make affect the larger macro economic machine as a whole. So micro vs macro really come down to a comparison of how much pain is caused when doing the right thing versus the wrong thing. Now, the micro vs macro issue is not just about the pain of doing the right thing; it also has to do with the costs of doing the wrong thing. For instance, if you run a small business that doesn't make a lot of sales, but you know that if you get a loan, you can pay for more employees, you'd probably be crazy not to at least think about getting a loan. But on the other hand, when you run a large corporation that is a significant financial drain on the national economy, you'd be crazy not to at least consider obtaining some more loan money.
In both cases, the question then becomes whether micro or macro economics is actually better in the long run. That is, are the benefits derived from the short-term decisions micro management schemes more valuable than the long-term decisions made by macro management? The answer, surprisingly, is no. In fact, there is a strong case that the former are more detrimental to society as a whole.
In order to understand this, you have to realize that in most cases the decisions made by the macro management are absolutely necessary. This means that for any real-world economic system, it would not make sense for entrepreneurs to start up business operations anywhere but in major metropolitan areas where goods and services are easy to come by. It would also be absurd for them to attempt to operate their small businesses in any area where goods and services were hard to acquire. In this way, both micro and macro economic systems are necessary for the smooth running of modern life.
Still, those who question the wisdom of micro or macro economics should remember that these systems have been operating for decades. Throughout history, both micro and macro have worked very well. However, both have their critics as well as their supporters. So whichever approach you take on the matter of how an economy works, you are likely to come away with a different answer than the one mentioned above. There's no one right way to look at the issue of how the world runs its affairs.
How Micro Vs Macro Economics Definition Is Going To Change Your – micro vs macro economics | micro vs macro economics
Branches of economics – Economics Help – micro vs macro economics | micro vs macro economics
Microeconomics vs | micro vs macro economics
You Will Never Believe These Bizarre Truth Behind What Is – micro vs macro economics | micro vs macro economics
Microeconomics vs Macroeconomics – micro vs macro economics | micro vs macro economics
Difference between Micro and Macro Economics – BBALectures – micro vs macro economics | micro vs macro economics
Difference between microeconomics and macroeconomics – Economics Help – micro vs macro economics | micro vs macro economics
One of the best things in life is seeing a smile on your parents' faces, and realizing that you are the reason. Just because someone else is not nice to us, doesn't mean we have to reciprocate in the same way. For every human in this world, God has given something noble and good in his heart. Always take care of your heart.
If you have been in business for any amount of time, then you have probably encountered some version of Economics 101. This is the class that discusses market data and the economic theory behind it. While the subject matter is important, it is only one component of the large number of topics that are ...
When learning economic terms, it is essential to be able to differentiate between commonly used and clearly defined terms. The difference between these two types of terms is actually fairly large. Generally speaking, the commonly used words have a clear and precise meaning while the more obscure ones have no definite meaning. In any ...