Economics is a popular college degree and can be an excellent career path. As you begin to explore this field, you may be surprised to discover that it involves several branches and niches. Two of the most influential include macro and microeconomics. Both are necessary at the individual level and for large-scale decision-making. Below, we'll explain how these branches differ and why it's worth studying both as you prepare for a career you’ll love.
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What is microeconomics?
Focused on individual actions and behaviors, microeconomics determines how people, their families (and the businesses they lead) make decisions amid scarce resources or other constraints. These seemingly small-scale decisions often occur in response to larger trends or concerns, such as the availability of new incentives or developments regarding production. Through a close study of microeconomics, we can better understand:
- Why specific goods are valued differently.
- How goods can be more efficiently produced and exchanged.
- What it takes for individuals to cooperate and collaborate.
The individual actors involved in microeconomics may be categorized as buyers, sellers, or entrepreneurs. Their behaviors and actions may be closely observed and contrasted against models to determine what might happen in the real world.
What is macroeconomics?
Emphasizing the entire economy, macroeconomics delves into broad trends rather than focusing on individual markets. This practice is crucial for government entities, as it reveals how major decisions could play out not only in the immediate future but also on a long-term basis. This branch aims to produce stable economic growth through solid fiscal policies. Progress toward this objective is measured based on key economic indicators, such as:
- Gross domestic product.
- Interest rates.
- Inflation.
- Unemployment.
Microeconomics vs. macroeconomics: main differences
The key differences between macro and microeconomics are built right into these descriptive terms. 'Macro' refers to the big picture — wide-scale economic concerns that play out at the federal or even international level. From gross domestic product (GDP) to inflation and unemployment, macroeconomics emphasizes the broad trends that have global implications.
Micro, as its name implies, focuses on smaller (albeit just as important) concerns that involve individual people, families, or entities. While microeconomics' focus may go as broad as an entire industry, it typically does not rise to the level of national policies — although these can drive the individual decisions that form the basis of microeconomics.
While there are many significant differences between macro and microeconomics, it's important to remember that both fields are equally important and have a huge impact on one another. The individual decisions and practices that seem to play out on a small scale with microeconomics can ultimately shape the broader economy. Similarly, decisions made at the federal level will impact the individual consumer.
Why study economics?
While it's important to understand the many similarities and differences between the various branches of economics, there's no denying that economics, in general, is a hugely influential field that warrants close study. Both types of economics can shape fiscal policies and drive key business decisions.
At the broad level, we need greater expertise in economics to ensure that tomorrow's leaders make prudent decisions that benefit not only their own bottom line but also the overarching economy. On a personal level, economics is a valuable area of study that provides numerous academic and professional benefits. Key considerations include:
Economics is part of everyday life
Economics plays into every decision you make, no matter how small it may seem. This is especially evident when you study microeconomics and behavioral economics, which reveal the wide range of factors that shape your daily life. Core concepts offer insight into how you allocate your time, interact with loved ones, and make decisions that benefit your general health and well-being.
Similarly, a detailed understanding of macroeconomics can help you make sense of the world around you. While you'll have less control over wide-scale economic concerns, you can at least anticipate new developments and plan your financial strategy accordingly. Similarly, a basic grasp of macroeconomics will help you spot cyclical trends, allowing you to take comfort (or, when necessary, take action) when new economic challenges arise.
Prepare for graduate school
No matter your personal career aspirations, studying economics at the undergraduate level will give you a solid foundation for future academic and professional pursuits. This is a popular bachelor's degree among all types of students, including those with both technical and management-oriented goals. Meanwhile, graduate program admissions look favorably on applicants with economics degrees.
As you take economics courses, you'll also gain problem-solving skills vital for the GRE or the GMAT. Later, you'll be thoroughly prepared for the high-level research you encounter in graduate school.
Learn skills to help your career
You may plan to jump straight into your career after graduation. If so, you'll need to demonstrate the targeted skills that matter to today's demanding employers. Currently, your chances for professional success are greatest if you possess a blend of technical and soft skills. A Bachelor of Science in Economics can deliver the following essentials:
- Quantitative analysis
- Business communication
- Collaboration
- Problem-solving
- Decision-making
Gain perspective on global issues
News headlines can sometimes be confusing and downright distressing at times, but they make a lot more sense when grounded in economic theory. As we've discussed, a basic understanding of macroeconomics can provide both insight and comfort when the world around you seems chaotic. Often, however, this understanding extends beyond strictly economic concerns. Topics that make more sense upon studying economics include national security and immigration.
What you will learn in economics classes?
Both macro and microeconomics classes help you gain in-depth knowledge and a variety of important skills. These courses center around various economics concepts, such as:
- Aggregate expenditure
- Equilibrium output
- Federal Reserve
- National income accounting
- Opportunity cost
- Supply and demand
Should you take micro or macroeconomics first?
When determining your college trajectory, microeconomics vs. macroeconomics can feel like a chicken or egg scenario. Both introductory courses are important — and both should be taken early on. Many students prefer to take microeconomics first because it feels more applicable to their daily lives, so the concepts should be easier to grasp.
To that end, the Central Michigan University (CMU) major map for both the Bachelor of Arts and Bachelor of Science in Economics begins with microeconomics during the first semester and continues on to macroeconomics during the second semester. Both courses are prerequisites for nearly all other economics classes. Later on, the original order is reversed: an intermediate course in macroeconomics is recommended during the fourth semester, followed by intermediate microeconomics during the fifth semester. These are only recommendations; ultimately, the best path will be determined with help from an academic advisor.
Economics at CMU: your ticket to a bright future
At CMU, we offer a wide variety of economics programs designed to prepare you for success in both academia and the professional world. At the undergraduate level, this includes both business and non-business economics majors. Meanwhile, our master's degree can function as a wonderful stepping stone for top doctoral programs. Contact us today to learn more about these and other opportunities.
Blog: All Things Higher Ed posted | Last Modified: | Categories: General Education
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