Microeconomic

1. Microeconomics
examines the behavior of individual decision-making units—business
firms and households.

2. • Microeconomics examines the behavior of
individual decision-making units—business
firms and households.
• Macroeconomics deals with the economy as a
whole; it examines the behavior of economic
aggregates such as aggregate income,
consumption, investment, and the overall
level of prices.

3. Introduction to Macroeconomics
• Microeconomists generally conclude that
markets work well. Macroeconomists,
however, observe that some important prices
often seem “sticky.”
• Sticky prices are prices that do not always
adjust rapidly to maintain the equality
between quantity supplied and quantity
demanded

4. Macroeconomic Concerns
• Three of the major concerns of
macroeconomics are:
– Inflation
– Output growth
– Unemployment

5. The government has used to influence
the macroeconomy
• There are three kinds of policy that the
government has used to influence the
macroeconomy:
1. Fiscal policy
2. Monetary policy
3. Growth or supply-side policies