Macroeconomics: Viewing Businesses From Above
Economics is the study of scarcity and choice. Hence, the goal is to make the learner wiser and smarter when handling decisions. Moreover, this subject could be applied to almost everything people can imagine. Mathematics, Geography, and even Physical Education need economic perspective to gain success. No matter how good you are, you won’t succeed if you choose to abandon the economy.
Still, the humans’ factor mustn’t be underestimated. Almost every concept will become obsolete if people are involved. For instance, a ceteris paribus is always the required condition if we want to predict the market. Communism and Capitalism are both phenomenal when explaining how to regulate the market. But when put on practice, none of them work as intended to be. Hence, we could say that people are the most crucial and complex variables.
Subjects are further divided into smaller focus to accommodate humans’ complexity. As an example, science studies split into physic, biology, and chemistry. Moreover, economics is divided into microeconomics and macroeconomics. But now we are focusing more on the latter. For starter, Macroeconomics is the study of economics as a whole. Therefore, this subject is commonly discussed along with its general environment affected by it.
What Sets Apart Macro From Micro
Macroeconomics deals with economic issues as a framework. Matters like tax rates, unemployment problems, and imports are the focus of this subject. Because of that, Macroeconomics guides the nation on what steps forward they should take. A lack of expertise and observation in this field will generate problems for the government and its people.
On the other hand, microeconomics resolves problems on a daily-life basis. Where to invest, why you should you work for them, and which bank is the best are the problem this division of economic resolves. Individuals that don’t know the basic of microeconomics will encounter difficulties on wealth. So, it is almost an obligation to study the basics of this field.
So, both subjects make a constant loop of feedback with each other. Excellent macroeconomics will never be successful if the people are not keen on microeconomics. And microeconomics alone is not enough when macroeconomics doesn't support it. In simple terms, macroeconomics deals with economic objects that individuals cannot control. Microeconomics resolves problems that individuals can control.
Grim Events Abrupt When People Neglected Macroeconomics
In the 1920s, the United States of America had a massive growth in its economy. In those times, the production and consumption rose sharply. The financial report said that the USA had received a 42 percent improvement in its economy. But in 1929, the grim and unforgettable event happens. The market had, and economic depression ravaged the country.
The USA unemployment rates skyrocketed to 600%. The ten years long advancement in commerce are considered gone in a single year. Many people are still debating on how this event unfolded chronologically. But the experts are on the same mindset when discussing why it happened— the nation took misguided steps in the economic sector.
"If all the economists were laid end to end, they would not reach a conclusion."— George Bernard Shaw
Back then, lots of economic-related jargon we know today didn’t exist. For instance, GDP or Gross Domestic Products is the benchmark of how well a nation is doing economically. And Income per Capita shows us the amount and percentage of wealth distributed to the people. These idioms that are now learned in junior high school didn’t exist in the 1920s. Moreover, nations made their economic decision based on something unpredictable, such as stock markets. So, it isn’t surprising for professional economists that the USA made a fatal step policy on its economy.
The Rise of Macroeconomics
After that event, people started to realize that every economy will eventually meet its downfall. Then, governments invested their resources to search for dependable references to minimize recession. Then, they found the answers in this sophisticated field of study: macroeconomics.
With macroeconomics, nations could predict what the future will be if given enough information. Guided by experts, economic approaches rarely will go wrong. This outlook will always work unless the information is not enough, and human errors come into play. This year, the economy was predicted to rise. As we all know, the coronavirus strikes down any hope for a growing economy in 2020. Coupled with, many resistances from people believing that coronavirus is no more than flu make quick economic recovery impossible.
In the present, we have a better understanding of the economy in general. There are abundant resources on the internet to accommodate it. Now we can acknowledge what the government tries. Keeping that in mind, people have a better chance of gaining wealth than in the past. No aristocracy or discrimination that holds people back to achieve success. Thus, climbing the social ladder in half-generation is highly probable.
The Pattern of Wealth and Knowledge
People have to know that economy is related to the prosperity of which the foundation of civilization is known. Additionally, society needs many specialized fields to function. Medicinal knowledge isn’t lower than knowing how to get rich. In this case, we shouldn’t believe that we only need one skill to get a job. Learning the basics of many subjects is also important to understand the world better. As the proverb said: "Jack of all trades, master of none is oftentimes better than master of one."
“An investment in knowledge always pays the best interest.”— Benjamin Franklin