1.2 Microeconomics and Macroeconomics

Microeconomics and macroeconomics are two different perspectives on the economy. The microeconomic

perspective focuses on parts of the economy: individuals, firms, and industries. The macroeconomic

perspective looks at the economy as a whole, focusing on goals like growth in the standard of living,

unemployment, and inflation. Macroeconomics has two types of policies for pursuing these goals: monetary

policy and fiscal policy.

1.3 How Economists Use Theories and Models to Understand Economic Issues

Economists analyze problems differently than do other disciplinary experts. The main tools economists use

are economic theories or models. A theory is not an illustration of the answer to a problem. Rather, a theory is a

tool for determining the answer.

1.4 How To Organize Economies: An Overview of Economic Systems

We can organize societies as traditional, command, or market-oriented economies. Most societies are a mix.
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