A study of economics usually begins by dividing the subject into microeconomics and macroeconomics. The former focuses on the exchanges of goods and services between consumers and firms in markets. In contrast, the latter focuses on exchanges that occur across all markets within a country. Macroeconomics examines the interrelated actions of consumers, businesses, government agencies, financial intermediaries, and global trading partners as they exchange resources, goods, and services as well as facilitate currency and quantity flows.
The overall purpose of this learning pathway is to gain a better understanding of the way markets function within a society. Your goal is to:
- Identify the determinants of demand and supply.
- Describe how changes in demand and supply lead to changes in a market’s equilibrium price and quantity.
- Describe the circular flow model, identifying linkages between the markets for goods and resources as well as the exchanges between businesses and households.