A Beginners Guide To

Microeconomic and Macroeconomic Trends and Financial Regulation

Any economics student that you come across is well aware of the fact that there are two major disciplines in economics, namely, macroeconomics and microeconomics. And sadly, these two disciplines are against each other. In the present, there will be many changes that will affect the financial services industry. There are many forces that affect the current financial regulation of the country. It is only in present years in the financial services industry that two major forces are clashing with each other. The area that most business students tend to gravitate toward is microeconomics. In this set-up, profit maximization is the overall goal. Businesses can make as much money as possible through fixed costs and marginal costs. Simply put, microeconomics views the world using the eyes of the CEO. A CEO does the best that they can for the company to deliver value and make more money.

With macroeconomics, on the other hand, it appeals more to all the policy nerds. The goal of this economic discipline is to attain equilibrium of the market. This means that goods and services with the greatest number can be exchanged by sellers and buyers using prices they have mutually agreed upon. Competition between business establishments is good. The use of oligarchies and monopolies is bad. If you look at the world with macroeconomics, you are using the eyes of the government. This implies making everyone involved happy or even sort of equally unhappy.

You can expect these two perspectives to be going against each other with who different they are. While efficient markets generally make everyone happy, the government must take the necessary steps that may go against the microeconomics of businesses to get there. Sometimes, competition can only be fostered when the financial industry finds a way to block the merger. Sometimes, there must be proper legislation of disclosures so that informed decisions are made between buyers and sellers. At the same time, certain activities must be stopped or regulated so that some will not be harmed by others financially.

The extent of market regulations is always a never-ending fight between the government and business sector, which is very much something you can expect. However, you should know that if the economy is on the rise and everyone is quite happy, the power struggle between microeconomics and macroeconomics stops. When businesses make money, they become happy. Consumers are equally happy too because they have money. The government is also happy when everything in the system seems to work just good for all involved sectors.

Unfortunately, the ongoing financial crises have signaled the impending ruin of the financial services industry. Any market bubbles are the responsibility of government regulators. The government is also responsible for providing proper financial and securities regulations and measures that will help save the economy and keep it running for long.

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