Question

What is the difference between microeconomics and macroeconomics?

Short answer

Microeconomics deals with the study of individuals whereas macroeconomics deals with the study of the country as a whole.

Step-by-step solution

Step 1. Definition of Microeconomics and Macroeconomics.

Microeconomics is that branch of economics that deals with the study of individuals. It focuses on the individual decision-making of households, workers, and businesses.

Macroeconomics is that branch of economics that deals with the study of the economy as a whole and focuses on broad issues such as the growth of production, inflationary price rises, government deficits, etc.

Step 2. Differences between Microeconomics and Macroeconomics.

The differences between microeconomics and macroeconomics are:

1. Microeconomics deals with individual agents like households, workers, and businesses whereas Macroeconomics deals with broad issues like inflation, unemployment, imports, and exports.
2. Microeconomics deals with how to produce goods on a budget, what to produce with given resources whereas Macroeconomics deals with what goods and services could be produced by the nation.
3. Microeconomics deals with tools like supply and demand and controls the price levels whereas Macroeconomics deals with major economic factors like GDP (Gross Domestic Product) and how it affects unemployment rates, level of prices.