Economists are interested in the choices people make when they shop, when they choose jobs, and when they vote, as well as the choices made in state capitols, at the Federal Reserve, and on Wall Street. Understanding the sources of economic growth, differences in income across countries, rate of inflation, and the appropriate policy responses to recessions are fundamental issues in macroeconomics, which is the study of the performance of an economy as a whole. Microeconomists study households, firms, and markets. For example, why has the price of energy fallen relative to other prices, why do housing prices vary across locations, why do similar people earn such different pay, and why do firms produce and price things the way they do
Economists participate in debates about policy toward climate change, international trade, taxes, health care, immigration, and crime. At a deeper level, the fundamental institutions that support economic activity are important, as well. Such institutionslegal principles and laws, social norms, even families and communitiesfacilitate market and non-market transactions, investment in human and physical capital, innovation and technological change, and social and geographic mobility. This leads to questions about the role of government in regulating, taxing, subsidizing, or otherwise affecting markets and related institutions.