branches of economics, macro and micro economics and others branches of economics, Economics can be grouped into two major divisions. These are micro – economics and macro –Economics Micro – economics and macro economics
BRANCHES OF ECONOMICS
Economics can be grouped into two major divisions. These are micro – economics and macro –
Micro – economics as a branch of economics
Definition: Micro – economies refers to the branch of economics which deals with smaller units or components of the economy. It is concerned with the analysis of the basic decision making components of households, individuals, firms and governments. It relates to cost, output, production, pricing and marketing activities of households, firms and governments.
Advantages of Micro – economics of economics
- Better understanding: Micro – economics helps in the better understanding of the functioning of the various units or components of the economy.
- Making of policies: it also enables us to make and develop better policies that will improve the welfare of the people.
- Knowledge of vibrant sector: The knowledge of micro – economies enables us to determine the vibrant sector of the economy.
- Development of economic tool: The study of micro – economics helps us to develop sound economic tools used for interpreting or solving economic problems.
Disadvantage of Micro – economics
- Unreliability of data: Data derived from the use of micro – economics principles are not always reliable for the same component or units.
what is Macro – economics as a branch of economics
Definition: Macro – economic refers to the branch of economics which deals with larger units or aggregate of the economy. Macro – economic relates to large aggregates such as national income, inflation, unemployment and balance of payment. In summary, macro – economic deal with the broad aggregates in the economy.
Advantages of macro economics
- Even distribution of income: The study of macro – economic helps to make sure that the wealth of the nation is not concentrated in the hands of few individual or to certain sectors of the economy see monopoly here.
- Full employment: In a macro – economy, full employment is provided to a larger proportion of the population.
- Provision of goods and services: Goods and service are generally provided for the people in a macro economic system.
- Balance of payment: Macro – economic also ensures adequate balance of payment in the total economy.
- Monetary policies: Monetary policies are being completely analyzed and comprehended easily through the study of macro – economy
- Increase in gross domestic product (GDP): The study of macro – economies has resulted in the increase in gross domestic product (GDP) leading to economic development.
- Stability of price: Price stability is obtained in macro – economy by minimizing price disturbances in the economy.
- Deficiency in aggregates demand: The causes of deficiency in aggregates demand are made known through the study of macro – economics like NAFDAC
Disadvantages of Macro – economy
- Statistical difficulties: The study of macro – economic makes statistical data difficult to analyze as a result of the grouping of macro- economic variables.
- Negative grouping of data: In the analyzing of macro – economics, data are being negatively grouped to be the same without considering the particular nature of each component of the economy.
Other Branches of Economics
- Pure economics: This is concerned with the study of the laws and theories derived from the study of economic behavior
- Applied economics: This is concerned with the application of the laws and theories in analyzing and solving economic problems.
- Mathematical economics; This is concerned with the collection and analysis of data as well as statistics.
- Monetary economics: This involves the study of money and banking.
- Business economics: Business economics is concerned with the study of trade, business organization and accounting.
- Development economics: This is concerned with the study of economic planning and national economics.