Difference between macro and micro economics

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1. Difference between macro and micro economics Maddali Laxmi Swetha, MBA (hr) http://maddaliswetha.blogspot.com/

2. The term economics define as The word 'economics' comes from two Greek words, 'eco' meaning home and ' nomos ' meaning accounts. Economics is that branch of knowledge which studies the processes through which the resource which are scarce in nature are allocated to satisfy the unlimited wants of the people. In other words, the economics of the individual agent's decisions about resources is referred to as microeconomics, while macroeconomics studies the interactions in the economy as a whole.

3. What is micro and macro economics? Micro Economics talks about the actions of an individual unit, i.e. an individual, firm, household, market, industry, etc. Macro Economics studies the economy as a whole, i.e. it assesses not a single unit but the combination of all i.e. firms, households, nation, industries, market, etc.

4. Difference Between Micro and Macro Economics Meaning: Microeconomics is the branch of economics that studies the behavior of an individual consumer, firm, family is known as Microeconomics. Macroeconomics is the branch of economics that studies the behavior of the whole economy, (both national and international) is known as Macroeconomics.

5. Difference Between Micro and Macro Economics Microeconomics deals with individual economic variables. Macroeconomics deals with Aggregate economic variables. Business Application: Microeconomics is applied to operational or internal issue. Macroeconomics environment and external issues.

6. Difference Between Micro and Macro Economics Tools: Microeconomics is the demand and supply. And Macroeconomics is the Aggregate Demand and Aggregate Supply. Assumption of Microeconomics : It assumes that all macro-economic variables are constant. Assumption of Macroeconomics: It assumes that all micro-economic variables are constant.

7. Difference Between Micro and Macro Economics Microeconomics: Theory of Product Pricing, Theory of Factor Pricing, Theory of Economic Welfare. Macroeconomics: Theory of National Income, Aggregate Consumption, Theory of General Price Level, Economic Growth.

8. Difference Between Micro and Macro Economics Scope: Microeconomics it covers various issues like demand, supply, product pricing, factor pricing, production, consumption, economic welfare, etc. Macroeconomics it covers various issues like, national income, general price level, distribution, employment, money etc.

9. Difference Between Micro and Macro Economics Importance of Microeconomics: It is helpful in determining the prices of a product along with the prices of factors of production (land, labor, capital, entrepreneur etc.) within the economy. Importance of Macroeconomics: It maintains stability in the general price level and resolves the major problems of the economy like inflation, deflation, reflation, unemployment and poverty as a whole.

10. Difference Between Micro and Macro Economics Limitations of Microeconomics: It is based on unrealistic assumptions, i.e. In microeconomics it is assumed that there is a full employment in the society which is not at all possible. Limitations of Macroeconomics: It has been analyzed that 'Fallacy of Composition' involves, which sometimes doesn't proves true because it is possible that what is true for aggregate may not be true for individuals too.

11. Conclusion of Micro and Macro Economics Every coin has two aspects: micro and macroeconomics are the two aspects of the same coin, also they cover the whole economy of a country. Remember, this a important point that which makes them different is the area of application.

12. Thank you Paper presentation made by Maddali Laxmi Swetha. Maddali Swetha Blog - http://maddaliswetha.blogspot.com/ https :// in.linkedin.com/in/maddali-swetha https :// twitter.com/maddali_swetha E-Mail ID: [email protected]