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Micro and Macro

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Shivangi Patnaik
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7 views

Micro and Macro

Uploaded by

Shivangi Patnaik
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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The allocation of

resources
Households and Individuals as Economic Agents

• Households and individuals are the most basic economic


agents.
• They are defined as a group of people living under the same
roof who share common resources.
• The household or individual agent is responsible for
consumption, meaning they purchase goods and services to
satisfy their needs and wants.
• Households and individuals impact the economy by
influencing both demand and supply.
• Their demand for goods and services affects prices, and
their labor supply affects production.
Firms as Economic Agents

• Firms, or "businesses," are another type of economic agent.


They are defined as an organization that produces goods
and services to sell them to make a profit.
• The business agent is responsible for production. This
responsibility for the profit means they combine labor,
capital, land, and entrepreneurism to create goods and
services.
• Businesses impact the economy by influencing both
demand and supply.
• Their demand for inputs affects prices, and their supply of
goods and services affects production.
Government and Central Banks as Economic
Agents

• Governments are yet another type of economic agent. They are responsible
for providing public goods and services and regulating businesses.
• They are also responsible for stabilization, which means they use fiscal and
monetary policy to maintain economic stability. Governments impact the
economy by influencing both demand and supply.
• Their demand for taxes and regulations affects prices, and their supply of
public goods and services affects production.
• Central banks are the final type of economic agent. They are financial
institutions that manage a country's money supply and interest rates. They
also serve as lenders of last resort.
• Central banks impact the economy by influencing both demand and supply.
Their money supply management and interest rates affect prices, and their
lending practices affect production.

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