![]() Another measure used is GDP per capita, which is a measurement of the value of all goods and services divided by the number of participants in an economy. So, a region is considered in better health when the ratio of GDP to expenses is higher, meaning in lay terms that a nation is bringing in more than it puts out. GDP is the total value of all final goods and services legally produced in an economy in a given time period. Macroeconomics is typically used to determine the health of a nation's economy by comparing the GDP of a country and its total output or expenses. Significant fields of study in microeconomics include general equilibrium, markets under asymmetric information, choice under uncertainty, and economic applications of game theory. One of the goals of microeconomics is to analyze market mechanisms that establish relative prices among goods and services and the allocation of limited resources among many alternative uses. Microeconomics, on the other hand, is the branch of economics that is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific markets. Macroeconomics involves the study of aggregated indicators such as GDP, unemployment rates, and price indices for the purpose of understanding how the whole economy functions, as well as the relationships between such factors as national income, output, consumption, unemployment, inflation, savings, investment, international trade and international finance. This includes national, regional, and global economies. Theory of General Price Level : This involves the study of the prices of goods and services and how they are affected by either inflation or deflation in an economy.Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, as opposed to individual markets. Theory of International Trade :Focuses on international trade policies and how they may affect economic stability. Factors such as national income and GDP directly impact the economic growth of a country and the world in general. Theory of Economic Growth and Development :Macroeconomics focuses heavily on a nation's economy. Individuals have greater demand power when employed than when they are not, which in turn either strengthens or weakens the whole economy. Theory of Employment : This scope of macroeconomics helps explain the factors that lead to unemployment as it affects supply and demand. This theory explains the impact of reserve banks within an economy. This theory emphasizes the importance of placing feasible monetary and fiscal policies and their effect on an economy. Theory of Money : The change in the value of a currency directly impacts a country's economy. It helps in analyzing economic performance and explaining a country's employment trend. Theory of National Income :It involves different variables that are involved in determining and measuring national income. Six theories hold the scope of macroeconomics. ![]() Scope of Macroeconomics : This involves the economic well-being of a nation. Resources are determined to be allocated efficiently when the production efficiency is at par with the efficiency in consumption, meaning that goods produced can satisfy the demand within a community. This means that the scope of microeconomics is limited to the price theory. Theory of Economic welfare : This involves the efficient allocation of resources. This theory helps to explain how these rewards and gains are determined. ![]() Theory of Factor Pricing : All variables that contribute to production, such as labour and capital, get a return in the form of wages and profits, amongst many others. Prices are determined by forces of supply and demand within the market. ![]() Theory of Product Pricing:This theory helps explain how the prices of goods and services are determined by analysing consumer behaviour and the supply of commodities. ![]() The scope of microeconomics can be placed into 3 parts: ![]()
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