Answer with reason, whether you agree or disagree with the following statement.
Macro economics is different form micro economics.
We agree with the statement that macro economics is different from micro economics.
Microeconomics deals with the issues pertaining to individual economic units, basically consumers, and firms, that interact in the market of different good and services. It studies how consumers make their consumption choices and decisions given their money income and the prices of goods and services. It analyses how the firms decide how much to produce and by different input combinations. It also studies how prices are determined in both commodity market as well as in the factor market based on the demand and supply analysis. Thus, in other words, microeconomics is a study that basically focuses on behaviour of individual consumer and producer. It is also called the Price theory as it primarily focuses on how prices are determined both in commodity and factor markets.
On the other hand, Macroeconomics studies how an economy as a whole operates. It focuses on the aggregate measures such as, Aggregate Demand, Aggregate Supply, Aggregate Price Level, etc. It studies how these variables are determined and how they change over time. It helps us in understanding various economic relationships and economic problems at the economy or aggregate level. It is also known as the Theory of Income and Employment as its main focus is on how income and employment levels are determined. In Macroeconomics, we confront major problems such as poverty, unemployment, inflation, BOP disequilibrium, etc.
Thus, we see that macro economics is different from micro economics.
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- Introduction and Features of Micro Economics