Microeconomics and Macroeconomics

Microeconomists tend to offer a detailed treatment of one aspect of economic behaviour, but ignore interactions with the rest of the economy in order to preserve the simplicity of the analysis. A microeconomic analysis of miners' wages would emphasize¹ the characteristics.of miners,,and the ability of mine owners to pay. It would largely neglect the chain of indirect effects to which a rise in miners' wages might give rise. When microeconomic analysis ignores such indirectly induced effects it is said to be partial analysis.

In some instances, indirect effects may not be too important and it will make sense for economists to devote their effort to very detailed analyses of particular industries or activities. In other circumstances, the indirect effects are too important to be swept under the carpet and an alternative simplification must be found.

Macroeconomics emphasizes the interactions in the economy as a whole. It deliberately simplifies the individual building blocks of the analysis in order to retain a manageable analysis of the complete interaction of the economy.

For example, macroeconomists typically do not worry about the breakdown of consumer goods into cars, bicycles, televisions, and calculators. They prefer to treat them all as a single bundle called "consumer goods" because they are more interested in studying the interaction between households' purchases of consumer goods and firms' decisions about purchases of machinery and buildings.

Types of Economic System

Planned economies are sometimes called "command economies" because the state commands the use of resources that are used to produce goods and services as it owns factories, land and natural resources. Planned economies are when the government takes all the decisions, the government decides production and consumption. The actual system employed varies from state to state, but command or planned economies have a number of common features.

In a true market economy the government plays no role in the management: of the economy, the government does not intervene in it. The system is based on private enterprise with private ownership of the means of production and private supplies of capital, Firms producing these goods will make more profits and this will persuade more firms to produce these particular goods rather than less favoured ones.

Thus, we can see that in a market economy it is consumers who decide what is to be produced.

Command and market economies both have significant faults. Partly because of this, an intermediate system has developed, known as mixed economies.

A mixed economy means very much what it says as it contains elements of both market and planned economies. In mixed economies some resources are controlled by the government whilst others are used in response to the demands of consumers.

Technically, all the economies of the world are mixed: it is just the balance elements between market and planned elements that alters. Some countries are nearer to command economies, while others are closer to free market economies.

THE INTERNET

The Internet, a global computer network which embraces millions of users all over the world, began in the United States in 1969 as a military experiment. It was designed to survive a nuclear war. Information sent over the Internet takes the shortest path available from one computer to another. Because of this, any two computers on the Internet will be able to stay in touch with each other as long as there is a single route between them. This technology is called packet switching. Owing to this technology, if some computers on the network are knocked out information will just route around them.

Most of the Internet host computers (more than 50%) are in the United States, while the rest are located in more than 100 other countries.

The most popular Internet service is e-mail. Most of the people, who have access to the Internet, use the network only for sending and receiving e-mail messages. However, other popular services are available on the Internet: reading USENET News, using the World-Wide Web, telnet, FTP, and Gopher.

If people see that they can make money from the Internet, commercial use of this network will drastically increase.

However, some problems remain. The most important is security. When you send an e-mail message to somebody, this message can travel through many different networks and computers.. In spite of the fact that there arc many strong encoding programs available, nearly all the information being sent over the Internet is transmitted without any form of encoding, i.e. "in the clear". But when it becomes necessary to send important information over the network, these encoding programs may be useful. Some American banks and companies even conducl transactions over the Internet. However, there are still both commercial and technical problems which will take time to be resolved.