Question

Distinguish between the following:

Slicing method and Lumping method

Answer 1

	Basis of Difference	Slicing Method	Lumping Method
1.	Process	It splits up the entire economy into small individual units.	It splits up the entire economy into big lumps (sectors).
2.	Used in	It is used in microeconomics for intensive study.	It is used in macroeconomics for intensive study.
3.	Variables used in the method	It uses microvariables, for example, individual income and individual output.	It uses macro variables, for example, aggregate output and national income.
4.	Nature of Study	The study is individualistic and detailed, focusing on specific components.	The study is aggregate and general, focusing on overall economic trends.
5.	Objective	To understand the behaviour of individual units and how they make decisions.	To understand the functioning of the entire economy and policy implications.