Microeconomics and macroeconomics Essay Example for Free

Micropolitical economy and macroeconomics EssayMicroeconomics is the branch of economics which deals into a more unmarried ground of the study, such as the choices made by people in foothold of the utilization and parcelling of resources as well as the pricing of goods and services. In addition, it includes taxes and the policies created by governments. This field of economics deals with supply and claim together with separate eventors that acts as determinants in identifying the price levels for particular companies in specific industries.This is exemplified by how microeconomics direction on a specific companys potential to maximize its production as well as its efficiency to lower its prices to better compete in the particular industry that it belong to (Investopedia, n. p. ). On the other hand, macroeconomics deals with the appearance of the economy as a whole. Unlike microeconomics, it does not focus on specific companies but kind of takes into account entire indu stries and economies.This field of economics studies phenomena that take place in a wide scope of the economy like the effects of Gross National Product (GDP) with unemployment, national income, rate growth as well as price levels. A good example is how macroeconomics measures the effects of the rise and fall of light up exports in a countrys capital account and also how the unemployment rate affects the status of the GDP (Investopedia, n. p. ). Nevertheless, even though these two fields of economic are different from each other, they are actually interdependent.This is due to the fact that most of the issues that fall under each field overlap and thus, they compliment each other. Basically, microeconomics has a bottoms-up onward motion while macroeconomics has a top-down approach. Nonetheless, they should be understood and analyzed in order to fully perceive how the economy works (Investopedia, n. p. ). Distinguish between positive and normative economics. Positive economics is responsible in providing a system of generalizations, which could be used to make accurate predictions regarding the effects of any variation in circumstances.It is free of any ethical position or normative judgments. Keynes further elaborated on this head by saying that it deals with what is and not with what ought to be (Economists View, n. p. ). Being the case, positive economics is or can be an objective science because it is judged according to precision, scope, and conformity as well as with empirical evidences. Positive economics deals with the interrelations of human beings with each other as well as with the economy (Economists View, n. p. ).Normative economics, on the other hand, is different from positive economics because it takes into account subjectivity in its analysis. It deals with what ought to be rather than what is really hap because it is heavily dependent in value judgments and theoretical scenarios. Normative economics tend to represent mental picture inste ad of an objective perspective. Moreover, normative economics could be valuable in establishing goals and new ideas. However, it should not be the basis for policy decisions (Investopedia, n. p. ).ReferencesMilton Friedman The Methodology of Positive Economics. 26 November 2006. Economists View. 19 July 2008. http//economistsview. typepad. com/economistsview/2006/11/milton_friedman_2. html. Normative Economics. 2008. Investopedia. 19 July 2008. http//www. investopedia. com/terms/n/normativeeconomics. asp. Whats the difference between macroeconomics and microeconomics? 2008. Investopedia. 19 July 2008. http//www. investopedia. com/ask/answers/110. asp.