Introduction

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Microeconomics studies individual economic agents (consumers, firms) and their decision-making in specific markets, focusing on maximizing personal profit or satisfaction. Macroeconomics studies the e

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Economic agents are individuals or institutions that take economic decisions. Examples include: consumers (decide what to consume), producers (decide what to produce), government (taxation, spending d

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Macroeconomists use a representative good to simplify analysis because: 1) Output levels of different goods tend to move together, 2) Prices of different goods generally rise or fall simultaneously, 3

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John Maynard Keynes was a British economist (1883) who published 'The General Theory of Employment, Interest and Money' in 1936. He established macroeconomics as a separate branch by challenging class

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The Great Depression (1929-1933) was a severe economic downturn where output and employment fell dramatically. In USA, unemployment rose from 3% to 25% and output fell by 33%. This challenged classica

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A capitalist economy has three main characteristics: (a) Private ownership of means of production, (b) Production takes place for selling output in the market, (c) Sale and purchase of labor services

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The four factors of production are: 1) Land - earns rent, 2) Labor - earns wages, 3) Capital - earns interest, 4) Entrepreneurship - earns profit. Entrepreneurs combine these factors to produce goods

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The four major sectors are: 1) Household sector - individuals/families making consumption decisions, 2) Firms/Business sector - production units seeking profit, 3) Government sector - providing public