Microeconomics deals with the study of choices and markets of every individual in respect of a certain time period. Organization profit or non-profit, household needs as well as government related agencies are related to the study of microeconomics. Some major elements of microeconomics are:
i. basic consumptions
A basic example of microeconomics illustrating the concept is mentioned as under:
If shortage of lettuce exists in a country, people will start buying cabbage instead of lettuce and thus the demand of lettuce will decrease. Thus, if supply increases, demand prices decreases and on the other side, if demand increases it will increase the prices too. (Perloff, 2007)
Macroeconomics is a term that is related to the relationship as well as nature of all the economic related quantities in term of total outputs. An overall view of an economy is some how known as the study of macroeconomics. In other words, we can say that a broader perspective is in linkage with macroeconomics, whereas shorter perspective is in linkage with microeconomics. The best example of macroeconomics phenomenon is illustrated as under:
Macroeconomics best deals with the situation of how to increase or decrease the net exports in order to make the country's capital account stable. In any economy target is to make the economy stable. Macroeconomics thus deals to balance the situation of any economy and to make it stable enough with the help of which exports and imports can be stabilized. Other example is how GDP can affect the economic situation.
Microeconomics plays an important role while taking decisions at workplace. Some major factors that can influence the decision making process are:
i. State of an economy
ii. Position of current competition
iii. Main logic
iv. Other known factors as well as unknown factors
I myself took various decision based on numerous microeconomics related tools. The impact of microeconomics study on decision-making process is vast and with the help of this, my business is working effectively while keeping in view all the pros and cons related to the economy. While working, if we all consider the microeconomics tools under consideration, we can generate effective outcomes too. Maintaining the price level equal, balancing the consumption level and then working forward is the main idea that is followed by me in my business. (Perloff, 2007)
Macroeconomic phenomenon is an important issue that can greatly affect our decisions. I always consider the macroeconomics issues while making business decisions. Macroeconomics tools are the one with the help of which we can evaluate as well as analyze the situation of an economy and can work further accordingly. While making business decisions, I always keep in mind the important economic based factors for instance:
i. GDP rate
ii. Exchange rate
iii. Inflation rate
iv. Interest rate
These all factors are important while starting a new venture or while making any decision. In country, high exchange rate and inflation rate is a negative sign where as the main target is to maintain a proper and a balanced interest rate. While taking any decision, macroeconomic tools are vital and they play an important role while maintaining stability in any economy.
In short, microeconomics & macroeconomics plays an important role in our daily lives as well as in our business activities too. While making any decision we all should keep this in mind that micro as well as macroeconomics is some major tools with the help of which we can generate effective outcomes too. Therefore, it is necessary to further work on according to these economic based rules in order to be at the top most position in terms of any economy. When micro and macro decisions are made keeping in mind all the pros and cons then outcomes will be for sure the best one. Micro & macro economic tools are thus essential for every business, organization, firms and even for household environment too. When any organization or business leaders consider every single micro and macro tool then outcomes can be generated in an effective as well as positive manner in order to make the situation effective and fruitful too. I would like to end by stating that micro and macroeconomics is important and they really play an important role in every day life. Thus, they should given some value in order to generate potential outcomes. If we do consider these tools, outcomes can be generated effectively and it can help us in numerous ways too.