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Macroeconomics studies the economic progress and steps taken by a nation. Macroeconomics: Large Scope Macroeconomics is the study of the decisions of countries and governments. Microeconomics offers a picture of the goods and services that are required for an efficient economy. When the worldwide economy is down, goods and services cannot be sold abroad as they used to be. International Monetary Fund, Micro and Macro: The Economic Divide. Investors can use microeconomics in their investment decisions, while macroeconomics is an analytical tool mainly used to craft economic and fiscal policy. You can learn more about the standards we follow in producing accurate, unbiased content in our. Individual income, individual savings, price of a particular commodity, etc. Macroeconomics account for the aggregate demand and supply of a nations economy. It not only tells you how much gets taken out of your paycheck, but it also affects real GDP and much more. The indirect effect is based on supply and demand for the underlying companys products and services. Smith believed that an invisible hand guides individuals to maximize their well-being and provide the best overall result to society as a whole. Competition Looking at the BEA announcement ( www.bea.gov/newsreleases/national/gdp/2011/gdp1q11_2nd.htm), you can see that in the first quarter of 2011, real GDP increased by 1.8 percent, whereas in the fourth quarter of 2010, it increased by 3.1 percent. Since the Keynesian revolution, economists have tried to merge microeconomics and macroeconomics by developing microeconomic foundations for macroeconomic models. Macroeconomic factors are important and hard to ignore, impacting economies and the state of our personal finances. Albanese describes Australia as presently in a 'productivity . Microeconomics would study how a company could lower its prices to increase its product demand in the market. To understand why both microeconomic and macroeconomic perspectives are useful, consider the problem of studying a biological ecosystem like a lake. Utility in Economics Explained: Types and Measurement, Utility in Microeconomics: Origins and Types, Utility Function Definition, Example, and Calculation, Definition of Total Utility in Economics, With Example, Marginal Utilities: Definition, Types, Examples, and History, What Is the Law of Diminishing Marginal Utility?