Understanding Microeconomics and Macroeconomics

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In the simplest way, Economics is the studying of how money operates & how that capital is exchanged between consumer & the business. There are two main branches of economics.
• Microeconomics
• Macroeconomics
Microeconomics
Microeconomics is a branch of Economics which study how individuals or business firms allocate or manage scarce resources. Supply, demand, elasticity of price, quantity of demand & quantity of supply are some concepts of Microeconomics.
Macroeconomics
Macroeconomics flows on a wide area rather than microeconomics. It describes about the structure & the behavior of whole economy. It consists of larger concepts such as inflation of the country, unemployment, international trade & market, national demand etc.
Study.com. 2018. What is Economics? - Definition & Principles - Video & Lesson Transcript | Study.com. [ONLINE] Available at: https://study.com/academy/lesson/what-is-economics-definition-principles-quiz.html. [Accessed 06 January 2018].There are key principles of the microeconomics which are as follows,
1. Supply, Demand & Equilibrium
Demand is the quantity requirement over a product or a service on a specific price at a specific time period. The law of demand describes that Demand is more at lower prices than the higher prices while the other things being equal. …show more content…

Afterwards the findings are discounted and compared with the initial investment. A high ratio for the NPV is considered as a good result. With the higher ratios for NPV the company can be considered on investments and when lower the NPV is the same will be rejected. Because the company insufficiency to cover the expenditure or the cost occurring for the project. The NPV is a good investment technique in financial appraisal as it adjust for timing of project’s cash flow. With the value of NPV states that an investment should only take place when only having a positive NPV ratio which is a higher

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