Question

write an essay including introduction and

(body1 about. Compare and contrast the major microeconomic failures)

(body2 about . macroeconomic failures and analysis of the problems of individual markets)

(body3 about) . Identify and summarize the dynamics involved in both kinds of market failure presented)

(body4 about) . How are these different economic breakdowns similar and different

(body5 about). what are the best ways to solve these economic problems and why?

and conclusion

please answer it by typing

please no plagiarism

Answer 1

Microeconomics deals with the individual demand function, individual supplysfunction, determination of prices, different market structure, etc. Since microeconomics deals with the individual market problem faced by both the consumer and lthe producer and brings the equilibrium in market. There are many major failures of microeconomics like demand pattern of consumers changes over time, technology gets old, disequilibrium in market, market failure, externalities, environment degradation, etc. These are some major microeconomics failures which occurs in the economy.

Likewose there are some macroeconomics failures like high inflation rate, unemployment, low per capital income, exchange rate fluctuations, BOP deficit, etc. These are the major failures which occurs in the economy as a whole.

The Dynamics in both the market failure are different because at the micro level the changes in individual demand, individual supply, etc. these occurs in short period of time but on the other hand at macro level the changes depends more on the policy side of the evonomy if the policy is more effcteffe in the economy the chances of the fluctuations in macroeconomics variable would be less. Therefore the policy Dynamics is the one which makes both the markets different.

There are some similar failures in both the markets like falls in individual demand leads to falls in aggregate demand similarly falls in individual income also leads to the falls in the per capital income. Some factors are different in both the markets at micro level economist deals with the problems faced by the domestic consumer and producers but at the national level or macro level the BOP, exchange rate, inflation rate makes the impact different at macro level.

To slove these above micro and macro economics problem economy has to follow the monetary and fiscal policy effectively. These poilicy will help to sort out the problems related to the both the major market problems. The monetary policy will help the inflation to keep under control whereas fiscal policy will help to keep the BOP in it's surplus and also help to boost the employment rate by increasing the wage rate.