Microeconomics or Macroeconomics

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Microeconomics or Macroeconomics

Microeconomics is the very difficult problem of economics that deals with the firm and the household, the ultimate cellular structure; thus the overtones of microscope and microbiology.

It then goes on to deal with the market - to tell, or anyhow imagine, how consumers, given their income and preferences, interact through the market with business firms to determine what is produced, in what amount, at what profit and at what price.

Macroeconomics became a separate topic of discussion and was so named in the aftermath of John Maynard Keynes and the Great Depression.


It then came generally to be realized that consumers and business firms might not have enough spendable income or might not spend or invest enough from their income to buy all the goods and services that could be produced.


There would, as a consequence, be idle plant capacity and unemployment. Or, though it was not a problem during the Depression, people and governments might spend in excess of the productive capacity of the economy. Then there would be inflation - one kind of inflation.

So it became a function of government to regulate the overall or aggregate relationships between all buyers and all sellers. This meant providing more purchasing power and more demand when that was indicated, restricting purchasing power and demand when that was called for. The expansion was accomplished by lowering taxes or increasing public spending or encouraging borrowing from the banks and consequent spending for business investment, housing or automobiles. business professional indemnity Current Insurance Law  Restriction was achieved by putting all these actions in reverse. Such is macroeconomic policy.

Learn More About Karl Marx in 2015

Gross National Happiness

We've heard it said that rather than talk about a Gross National Product we should talk about a Gross National Happiness.

Should we not have a measure of the quality of life rather than the quantity of goods? There have been efforts in that direction - to include values associated with social contentment and enjoyment.

They haven't been very successful - again, the problem of measurement.

One reason the British have had a low increase in Gross National Product is that they take a larger part of their return in the un-measurable rewards.

They have the best-maintained countryside... see: Gross National Happiness

Of interest

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