Microeconomics vs. Macroeconomics

These flashcards cover key concepts differentiating microeconomics and macroeconomics.

Microeconomics

The study of individual markets and sections of the economy, examining choices made by individuals, households, and firms.

Macroeconomics

The study of economic behavior and decision-making in the entire economy, focusing on large-scale economic factors.

Price Stability

The maintenance of a stable price level in an economy, minimizing inflation and deflation.

Government Intervention

Actions taken by the government to influence economic activity, which can occur in both individual markets (micro) and the overall economy (macro).

Demand

The quantity of a good or service consumers are willing to purchase at various prices.

Supply

The quantity of a good or service that producers are willing to sell at various prices.

Economic Growth

An increase in the production of goods and services in an economy over time.

Current Account Balance

A component of a country's balance of payments that measures the difference between a nation's savings and its investment.

Market Failure

A situation where the allocation of goods and services is not efficient, often justifying government intervention.

Multinational Corporations (MNCs)

Companies that operate in multiple countries beyond their home jurisdiction, often making decisions based on varying economic conditions.