basic difference between macroeconomics and microeconomics

BASIC DIFFERENCE BETWEEN MACROECONOMICS AND MICROECONOMICS FULL

BASIC DIFFERENCE BETWEEN MACROECONOMICS AND MICROECONOMICS FULL

A full understanding of complex economic system is possible only after having knowledge of both micro and macroeconomics.Following points help to understand how are microeconomics and macroeconomics interconnected: Economics is a single field of study which is divided in these two areas for the convenience in classifying the economic theories that deals with different economic phenomena. These two branches of economics are not mutually exclusive but they are interconnected and complement one another despite there differences in nature and scope. Interconnection Between Microeconomics and Macroeconomics Therefore, the basic difference between microeconomics and macroeconomics is in terms of area, scope, and scale of the subjects being studied. Related: 3 Definition Of Economics By Adam, Marshal, and Robbins

Objective is to maximize national income and growth. Objective is to maximize welfare of individuals and firms. Uses aggregate demand and supply as tools of analysis. Uses individual demand and supply as tools of analysis. Deals with aggregate variables as national income, general price level.Ĭoncerned with the production, distribution, and consumption of goods and services.Ĭoncerned with the economic growth, macro theory of distribution, theory of income output and employment.

Study of a particular and individual component of the economy such as individual firms, households, industry. Other difference between them can be presented in following table: Difference between micro and macro economics S.N The fact that macroeconomics deals with aggregate quantities, it is also called aggregative economics.Ī key difference between microeconomics and macroeconomics is their study area microeconomics studies individual economic variables whereas macroeconomics deals with aggregate economic variables. In contrast, macroeconomics is concerned with the nature, relationship, and behavior of aggregate economic variables such as national income, total consumption, savings and investment, total employment, general price level, and aggregate demand and supply. Hence, it microeconomics is the study of individual firms and households, individual prices, wages, incomes, individual industries and individual commodities. In this context, economic entities means individuals or small group of individuals such as household firms and industries consisting of several firms. Microeconomics studies economic behavior of individual economic entities and individual economic variables. Which comes first micro or macro economics?ĭifference between Microeconomics and Macroeconomics.What is an example of microeconomics and macroeconomics?.Interconnection Between Microeconomics and Macroeconomics.Difference between Microeconomics and Macroeconomics.

Basic difference between macroeconomics and microeconomics