Manzur Rashid

Although micro means small, microeconomics covers a wide set of topics. These include how consumers and businesses make choices and how those choices interact through the forces of supply and demand in the marketplace; when market outcomes might be considered good and why monopoly power and information problems can make those outcomes less good; problems of risk and insurance; and the gains from international trade.

Over the last 50 years, the U.S. economy has grown at an average annual rate of about 2.8 percent. Roughly 1.1 percent has come from population growth: the country typically adds more workers each year. But the majority of it comes from the fact that it gets more productive each year — to the tune of about 1.7 percent annually.

Macroeconomics is the study of the economy as a whole. What follows are summaries of some key information about how the economy works, including the basics of fiscal and monetary policy, the key summary statistics that macroeconomists examine in order to assess the health of an economy, and how the economy behaves in the short- and long-term.

Microeconomics is that part of economics that looks at the world from the perspective of consumers and firms — asking how they make their decisions and how those decisions come together to make different kinds of markets. You do that by building models of different situations that explore the results of different types of conditions.

Economies run on people, firms, and governments requiring and buying things. A need exists (demand) that firms fulfill (supply). Students of microeconomics spend time learning about the behavior of supply and demand in individual markets. Students of macroeconomics are interested in the economy as a whole, so the emphasis is on aggregate (that is, total) demand for goods and services and aggregate (total) supply.

Like any academic discipline, macroeconomics relies on the incremental progress of researchers, each building upon and improving previous work — like bricks holding up a wall or, more salubriously, adding new ingredients to old cocktail drinks. Here are five famous economists who had a huge impact on macroeconomics.

Like all practices, economics has its own terminology. Following are explanations of five essential terms that economists use all the time. When calculated for the economy as a whole, all these measures are equal: Gross Domestic Product (GDP): Value of final goods and services an economy produces in one year (a final good or service is one directly provided to the end user).

The field of macroeconomics continues to develop and change as new theories are put forward. Building on the work of great macroeconomists like Keynes and Tobin, here are five famous economists who are having a huge impact on macroeconomics. Robert Solow (1924–) Robert Solow is best known for his fundamental work on economic growth.