Microeconomics helps explain economic fluctuations, why the economy shrinks and expands and why some of the economy's resources are idle.

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Microeconomics focuses on the actions of individuals and industries, like the dynamics of demand and supply, and the determination of prices and quantities in individual markets, rather than the economy-wide phenomena. Economic fluctuations, expansions, and contractions are typically studied within the scope of macroeconomics, which looks at aggregate indicators such as GDP, unemployment rates, and inflation to understand the broader economy's performance.

Microeconomics Helps Explain Economic Fluctuations, Why the Economy Shrinks and Expands