It deals with consumer behavior, the theory of firms, individual labor markets, etc. Microeconomics studies the behavioral patterns of particular markets as well as their related segments in any economy. Macroeconomics is useful in determining and maintaining the various aspects of the general price level. Microeconomics helps in determining the price of any particular commodity concerning the price of substitute and complementary goods. In macroeconomics, a top-down approach holds prominence and is taken into consideration while dealing with various aggregate variables. While determining the behavior of any economy, microeconomics is known to adopt a bottom-up approach. In some cases, this proves to be untrue as it is possible that what’s shown for aggregate variables may not hold ground for individuals too. In macroeconomics, it has been assessed that the 'Fallacy of Composition' is involved.
MICRO AND MACRO ECONOMICS DIFFERENCE FULL
For instance, microeconomics assumes that a full employment situation exists in society this is untrue and impossible. Microeconomics finds its roots in unrealistic assumptions. It holds significance in resolving major economy-related issues such as deflation, reflation, inflation, unemployment, poverty, and so forth in the whole economy. Macroeconomics is useful for maintaining stability in the overall price levels in the economy. Microeconomics helps in estimating prices of commodities concerning various factors of production, such as land, labor, entrepreneur, capital, etc.
Macroeconomics deals with issues such as national income, distribution, employment, general price level, money, etc. Microeconomics deals with various issues such as demand, supply, production, product pricing, factor pricing, economic welfare, consumption, etc. Macroeconomics theories apply to environmental and external issues.
Microeconomics theories apply to internal and operational issues. This branch of economics deals with the economy at large and lays focus on aggregate variables like poverty, gross income, international income, fiscal policies, and so forth. This branch of economics deals with the performance and behavior of individual economic units and variables like a firm, family, consumer, etc. Macro and microeconomics are the two arms of economics.
0 kommentar(er)
