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Finance: What are Macroeconomics v. Microeconomics? 3 Views
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Transcript
- 00:00
And finance Allah shmoop What Our macro economics versus micro
- 00:06
economics Alright people Hedgehogs bumble bees raindrops dust bunnies Bedbugs
- 00:13
Bacteria protons corks you know Small micro the Empire State
- 00:16
Building the pyramids the Great Wall The you the continent
- 00:21
of Asia the Earth the solar system the galaxy the
Full Transcript
- 00:24
universe the multiverse A You know big macro Well that's
- 00:28
the basic difference At least a frame of it between
- 00:30
macroeconomics and microeconomics Big versus small macro economics deals with
- 00:36
economic principles on a large scale National unemployment rates international
- 00:41
trade Central bank interest rate decisions tariffs on foreign made
- 00:46
fuzzy bunny slippers Like those things I have a pair
- 00:49
micro economics Yet it deals with topics closer to home
- 00:52
It's about individuals Home mortgages car payments life insurance retirement
- 00:57
accounts of individuals mostly the retail price of fuzzy bunny
- 01:01
slippers Right It's also about individual firms like payrolls insurance
- 01:06
figuring out how many bunny slippers Teo make before Christmas
- 01:09
But the economy has been slow GDP only edged up
- 01:12
zero point one percent last quarter and unemployment rates have
- 01:15
ticked up to their highest level in three years The
- 01:17
Federal Reserve is worried and his considering lowering interest rates
- 01:21
Yeah those air concerns of macro economics Bunny slippers cost
- 01:25
twenty five bucks Regular slippers Cost Fifteen bucks Your daughter
- 01:28
wants the bunny slippers for Christmas but it's been a
- 01:31
rough year you know because the weak economy you've got
- 01:33
laid off a quarry Meanwhile your side gig tuning electric
- 01:37
bassoons has been slow Can you afford the extra ten
- 01:41
bucks for the bunny slippers over Just the normal rectangular
- 01:45
ones right Well that's a question of micro economics for
- 01:48
the bunny slipper firm While they might see that the
- 01:50
economy has been slow there are news reports about Cory
- 01:53
layoffs and the cratering electric bassoon market Earlier in the
- 01:56
year they bought a large supply of bunny slippers from
- 01:58
their Chinese manufacturing partner They don't sell enough of them
- 02:01
Well they'LL get stuck with a bunch of bunny slipper
- 02:03
inventory they can't get rid of should they drop the
- 02:06
price of the slippers like cut prices down to twenty
- 02:09
bucks from twenty five make sure they get rid of
- 02:11
most of the inventory by Christmas We'Ll those air questions
- 02:14
of micro economics as well Both types deal with the
- 02:17
same basic components though the difference has to do with
- 02:20
scale Both macro and micro economics deal with the function
- 02:24
of markets For instance the island nation of Macro vain
- 02:28
eah sees a decline in GDP In a panicked attempt
- 02:31
to fix the problem the central bank floods a country
- 02:34
with its currency macro dollars Inflation suddenly spikes All right
- 02:39
that's a macro economic issue Because inflation has jumped food
- 02:43
gets more expensive The all you can eat half ear's
- 02:46
delight meal at the buffet used to be nineteen ninety
- 02:49
nine But after the spiking inflation while now the price
- 02:52
rises to twenty nine ninety nine almost overnight you and
- 02:55
your family now have to decide well how many times
- 02:58
can we afford that meal per week You used to
- 03:01
do it four times Well now you'LL have to cut
- 03:03
down to twice a week and eat homegrown turn ups
- 03:05
the other two nights Yeah that's a micro problem Another
- 03:08
example Both micro and macro economics deal with supply and
- 03:11
demand Macro Vania discovers a small island inside its territorial
- 03:15
waters It turns out to have a large guano supply
- 03:19
on it's guano is the droppings of bats or seabirds
- 03:22
Finding an island full of it probably doesn't seem like
- 03:25
a big deal but it can be used as you
- 03:27
know fertilizer Mohr Aggregate supply of guano means prices for
- 03:31
fertiliser in the country fall right More supply same demand
- 03:35
Prices fall Also macro Vania is able to export toe
- 03:37
other countries helping its balance of trade and allowing it
- 03:40
to bring in more imports That's macro You can use
- 03:44
that cheap fertilizer to grow more Turn up You sell
- 03:46
them on the side Teo Get a little extra cash
- 03:49
Now you can afford one more night of Jeffers Delight
- 03:51
each week That's micro Well Micro economics doesn't just impact
- 03:55
households It operates on the scale of businesses as well
- 03:58
the guano trading firms that scrape it off the small
- 04:01
island and ship it overseas That's micro the small grocery
- 04:04
store that buys your excess turn ups Yeah that's micro
- 04:07
too OK so quick and very dirty Review Macro economics
- 04:11
It's the big stuff The national economy global trade interstellar
- 04:15
currency exchange total aggregate demand and supply as it relates
- 04:18
to inflation gross domestic product national income interest rates unemployment
- 04:22
and all kinds of changes price levels and liquidity That's
- 04:25
macro So then we have Micro Micro is all about
- 04:28
the individual of firm or corporation either smaller big business
- 04:32
or families and individuals And by the way those recording
- 04:35
devices the government has implanted in your brain Yeah you
- 04:38
hope those air microchips and definitely not macro chips That's 00:04:43.842 --> [endTime] not going to feel good in the morning
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