What is the difference between microeconomics and macroeconomics?

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Anurag Pathak28.65K December 2, 2023 0 Comments

score 0 · Answer 1 · 2023-12-02T14:22:14+00:00

Solution:-

Let us now study the various points of difference between Microeconomics and Macroeconomics.

Basis	Microeconomics	Macroeconomics
Meaning	Microeconomics is that part of economic theory which studies the behaviour of individual units of an economy.	Macroeconomics is that part of economic theory which studies the behaviour of aggregates of the economy as a whole.
Tools	Demand and Supply	Aggregate Demand & Aggregate Supply.
Basic Objective	It aims to determine price of a commodity or factors of production.	It aims to determine income and employment level of the economy.
Degree of Aggregation	It involves limited degree of aggregation. For example, market demand is derived by aggregating individual demands of all buyers in the particular market.	It involves the highest degree of aggregation. For example, aggregate demand is derived for the entire economy.
Basis Assumptions	It assumes all the macro variables to be constant, i.e., it assumes that national income, consumption, savings, etc, are constant.	It assumes that all the micro variables, like decisions of households and firms, prices of individual products, etc. are constant.
Other Name	Microeconomics is also known as ‘Price Theory’ as it is primarily concerned with determination of prices of commodities and factors of production.	Macroeconomics is also known as ‘Income and Employment Theory’ as it is primarily concerned with determination of level of income and employment.
Examples	Individual income, individual output.	National Income, National Output.