Distinguish between microeconomics and macroeconomics.Give suitable examples.
Answers
Microeconomics concerns itself with the small details that make a difference when evaluating individual companies. This includes production costs and market prices for goods and services. A lot of microeconomic information can be gleaned from the financial statements.
Macroeconomics focuses on aggregates and econometric correlations. Investors of mutual funds or interest rate-sensitive securities should keep an eye toward monetary and fiscal policy. Outside of a few meaningful and measurable impacts, macroeconomics doesn't offer much for specific investments.
Moreover, economists generally agree on the principles of microeconomics. As the International Monetary Fund (IMF) website states, "There are no competing schools of thought in microeconomics." This is not true with macroeconomics. Macroeconomic forecasting has a very poor track record, and the accepted version of macroeconomics has changed several times since its inception.