5. What is the importance of macroeconomics?
Answers
Answer:
Explanation:It helps to bring stability in price level and analyses fluctuations in business activities. It suggests policy measures to control inflation and deflation. It explains factors which determine balance of payments. At the same time, it identifies causes of deficit in balance of payments and suggests remedial measures.
Answer:
Microeconomics is helpful in the efficient employment of the limited, scarce resources of a country. The principal problem faced by the modern government is the allocation of its scarce resources among the competing ends. It is the burning problem of the day. Microeconomic theory explains the condition of efficiency in both production and consumption, which are vital to economics and highlights the factors which are responsible the departure from efficiency. On this basis microeconomic theory suggests suitable policies which should be adopted by modern governments to promote economic efficiency and thereby achieving all-round growth, prosperity and stability in the economy.