Question

difference between micro and macroeconomy

Answer 1

1. Microeconomics is the study of particular markets, and segments of the economy. It looks at issues such as consumer behaviour, individual labour markets, and the theory of firms.
Macro economics is the study of the whole economy. It looks at ‘aggregate’ variables, such as aggregate demand, national output and inflation.


2. Micro economics is concerned with:

Supply and demand in individual marketsIndividual consumer behaviour. e.g. Consumer choice theory

Individual labour markets – e.g. demand for labour wage determination

Externalities arising from production and consumption. e.g. Externalities

Macro economics is concerned with

Monetary / fiscal policy. e.g. what effect does interest rates have on the whole economy?

Reasons for inflation and unemployment.

Economic growth in International trade and globalisation

Reasons for differences in living standards and economic growth between countries.

Government borrowing