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Finance: What are Macroeconomics v. Microeconomics? 3 Views


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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

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

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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

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bucks from twenty five make sure they get rid of

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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

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eah sees a decline in GDP In a panicked attempt

02:31

to fix the problem the central bank floods a country

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with its currency macro dollars Inflation suddenly spikes All right

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that's a macro economic issue Because inflation has jumped food

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gets more expensive The all you can eat half ear's

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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

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demand Macro Vania discovers a small island inside its territorial

03:15

waters It turns out to have a large guano supply

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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

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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

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and all kinds of changes price levels and liquidity That's

04:25

macro So then we have Micro Micro is all about

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the individual of firm or corporation either smaller big business

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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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