INTRODUCTION OF TRADE

INTRODUCTION OF TRADE

Economics is a social science. Broadly speaking. It is concerned with the use of scarce resources for the satisfaction of human wants.Like other disciplines, economics is divided into several branches and sub-branches; The tow major branches are microeconomics and macroeconomics. Microeconomics is the study behavior of individuals and well-defined  groups of individual in the society,Economics is a social science. Broadly speaking. It is concerned with the use of scarce resources for the satisfaction of human wants. Like other disciplines, economics is divided into several branches and sub-branches; The two major branches are microeconomics and macroeconomics. Microeconomics is the study behavior of individuals and well-defined  groups of individual in the society, such as households, firms, and industries. On other hand, macroeconomics is the study of broad aggregate, such as national income, employment, consumption, and investment. In a sense, the micro-macro distinction is artificial because the actual decisions about productions, consumption, employment, investment, and so on, are made by the micro-units of the economy. Therefore, the basic principle of economic theory are those which explain the behavior of these micro-units. However, the distinction is justified by the basic differences in the objectives and methods of the two branches. Microeconomics deals primarily with the analysis of price determination and the allocation of specific resource to particular user. On other hand, macroeconomics deals with the determination of the levels of national income and aggregate resource employment. While microeconomics deals with individual prices and their relations to one another, macroeconomics deals only with aggregates price indices. As a result, the relationship between individual units and aggregates is not clear in macroeconomics. Nevertheless, the simplifications introduced by aggregation are quite useful. Despite the great usefulness of microeconomics to an under-standing of the way in which the individual decision-marking unite of the economy fit together to from a coherent whole, it’s practical use in explaining aggregate behavior is severely limited by its enormous complexity. A more practical approach is offered by macroeconomics, which attempts to describe the behavior of the economic system in terms of a few simple aggregate and aims explicitly at influencing public policy.