scope of economic s
Answers
Answer:
An economy of scope means that the production of one good reduces the cost of producing another related good. Economies of scope occur when producing a wider variety of goods or services in tandem is more cost effective for a firm than producing less of a variety, or producing each good independently
Answer:
Economists use different economic theories to solve various economic problems in society. Its applicability is very vast. From a small organization to a multinational firm, economic laws come into play. The scope of economics can be understood under two subheads: Microeconomics and Macroeconomics. Let’s discuss these in detail:
MicroeconomicsIt is the study of an economy as a whole. It explains broad aggregates and their interactions “top down.” Macroeconomics has the following characteristics:
Growth: It studies the factors which explain economic growth such as the increase in output per capita of a country over a long period of time.
Business Cycle: This theory emerged after the Great Depression of the 1930s. It advocates the involvement of the central bank and the government to formulate monetary and fiscal policies to monitor the output over the business cycle.
Unemployment: It is measured by the unemployment rate. It is caused by various factors like rising in wages, a shortfall in vacancies, and more.
Inflation and Deflation: Inflation corresponds to an increase in the price of a commodity, while deflation corresponds to a decrease in the price of a commodity. These indicators are valuable to evaluate the status of the economy of a country.