Macroeconomics and microeconomics.
The study of economics is divided into 2 main parts Macroeconomics and Microeconomics.
Macroeconomics is dealing with the economy as a whole taking into consideration the whole economies Gross Domestic Product, inflation rates and Interest rates. In this we deal with the study of the economy as a whole and its trends and current and future predictions. E.g. Australian GDP in the years 2005 – 2006 had a positive growing while increases in inflation rates were low while interest rates kept going up.
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Microeconomics deals with specific sectors and industries in an economy. In this field we look at growth rates and changes that take place within this industry over time, its current trends and future growth. E.g. In Australia in the year 2005- 2006 because of sustained growth and rising wages in the labour market there was a lot of pressure building up in the housing and real estate industry. This resulted in a rise in prises of real estate specially in metropolitan areas and suburbs. Because of the sustained economic growth the Federal Reserve of Australia raised interest rates, this drove down the pressure in this industry as less people could now afford to take out loans to buy housing. After a while (i.e. a few months) the demand for real estate kept rising again till the government hiked the interest rates yet again.
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