How is my day-to-day connected to everyone else’s?
We’re all connected somehow. Every decision that we make has a ripple effect, sometimes so wide that we can barely track it anymore. Some of those affected will be close to us – friends, family, colleagues. Others will be much further away – the creative mind that launched the internet, the farmer who grew our vegetables, the factory worker who produced our plastic bag.
One method of studying the economy is to zoom in on the specific decisions people and organisations make. How does a restaurant decide how much to charge for a bowl of soup? How do you decide between the soup and the steak? That’s microeconomics.
Another method is to zoom way out and look at the big picture of the economy. How many people have jobs, and what kind of jobs do they have? How quickly is the economy growing, and who is benefiting from that growth? That’s macroeconomics.