Differentiate between micro and macro economics?
Answers
Key Differences between Micro and Macro Economics
The points given below explains the difference between micro and macro economics in detail:
1.Microeconomics studies the particular market segment of the economy, whereas Macroeconomics studies the whole economy, that covers several market segments.
2.Micro economics stresses on individual economic units. As against this, the focus of macro economics is on aggregate economic variables.
While microeconomics is applied to operational or internal issues, environmental and external issues are the concern of macro economics.
3.Microeconomics deals with an individual product, firm, household, industry, wages, prices, etc., while Macroeconomics deals with aggregates like national income, national output, price level, etc.
4.Microeconomics covers issues like how the price of a particular commodity will affect its quantity demanded and quantity supplied and vice versa while Macroeconomics covers major issues of an economy like unemployment, monetary/ fiscal policies, poverty, international trade, etc.
5.Microeconomics determine the price of a particular commodity along with the prices of complementary and the substitute goods, whereas the Macroeconomics is helpful in maintaining the general price level.
6.While analysing any economy, micro economics takes a bottom-up approach, whereas the macroeconomics takes a top-down approach into consideration.
Microeconomics studies individuals and business decisions, while macroeconomics analyzes the decisions made by countries and governments.
Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach.
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