Earning an accounting degree online means developing a high degree of competency with a variety of different financial concepts, from those solely in the world of accounting to more broadly applicable economic principles. Students who understand the many forces and conditions that can influence their employer’s or client’s financial situation can offer stronger guidance.
Macroeconomics and microeconomics are core principles of economics that help students and professionals alike better understand how decisions are made and their consequences. A strong grasp of the differences between the two ideas gives accountants, economists, and other financial professionals vital context both in terms of past decisions and potential choices to make in the future.
Microeconomics vs. macroeconomics
Economics is the study of how people, organizations, governments, and other entities create, distribute, and use a wide variety of resources. A scarce resource is something which is limited in availability, whether due to price, location, or a variety of other factors. The study of economics includes money. All scarce resources, from grains and produce to precious metals, consumer goods, and industrial machinery, are included. Economics focuses on economic agents, individual actors who make decisions about how they interact with various resources. It also focuses on economies as a whole, which consist of units of economic agents, ranging from small towns or communities up to individual countries and the global marketplace. The divide between economic agents and larger economies is one of the key differences between microeconomics and macroeconomics. Let’s define microeconomics vs. macroeconomics and see how the two compare.
What is microeconomics?
Microeconomics focuses on economic decisions that can be seen as smaller from a high-level perspective. While these choices are important for the individuals, businesses, and other types of organizations that make them, few of them have an individual and substantial influence on the broader economy. One of the major points of emphasis in microeconomics is price levels, which has close ties to supply and demand and other factors that influence how companies price the good and services they offer.
Microeconomics has a core concept related to the rational action of the individual person or organization. The principles this field is based on assume that economic agents will act in a reasonable way that seeks to maximize their utility. Utility originally referred to the pleasure or satisfaction gained from a given decision, and is often used in this way in philosophical contexts and other discussions. However, in modern economics, it now indicates the preferred order of a set of choices or alternatives offered to an economic agent.
Microeconomics is important for accounting students because of how closely it ties into the work they do for their clients or employer. No matter if you’re a Certified Public Accountant who partners directly with individual clients or an internal accountant or auditor for a large business, the actions of those people and businesses fall under the scope of microeconomics.
What is macroeconomics?
A simple yet accurate way to look at macroeconomics is as the study of the big picture of economic activity, or the function of all relevant economic actors as whole. Macroeconomics concerns itself with trends and data tied to the actions of all individuals and businesses within a state, country, or other defied area. The sum total of the actions of economic actors inform macroeconomic measurements, such as unemployment rates and the gross domestic product. This high-level view provides valuable context about the industry in which a business operates, the economy as a whole, and a company’s role in it.
Macroeconomics helps economic actors understand the trends that exist on a much broader level but still have an influence on their day-to-day and long-term operations. While the exact reasons behind a rise in inflation or a drop in the unemployment rate isn’t significantly influenced by an individual actor’s choices, recognition of these changing factors improves microeconomic decision-making. For example, a company that notices a sustained decrease in unemployment can make an efficient choice to adjust hiring practices and the compensation offered to new hires as a way to attract top talent.
What accounting students learn about economics at UAB
Students pursuing an accounting degree online through UAB enjoy a strong education in foundational and advanced accounting principles as well as a broader financial education that includes a variety of economic topics and other considerations. The course curriculum for students pursuing a Bachelor of Science in Accounting degree includes a wide variety of accounting topics that comprise at least 30 credit hours of educational experience. Alongside the focus on accounting are six credit hours exclusively tied to microeconomics and macroeconomics. Students have many opportunities to apply what is learned in the two economics classes, part of the Lower Level Core, throughout the rest of their educational experience and into their professional careers.
Online students at UAB enjoy a world-class education that progresses at their own chosen pace, thanks to our totally asynchronous learning environment. To learn more, reach out to an advisor today.