What is macroeconomic and microeconomics?

Answer 1

The study of economics is divided by the modern economists into two parts viz. Micro economics and Macro economics. Micro economics and Macro economics, both the terms were used in 1933 by Prof. Ragnar Frisch from Oslo University of Norway. The word micro has been derived from the Greek word `Mikros' i.e. small and the word macro has been derived from Greek word `Makros' i.e. large.

According to Prof. K. E. Boulding, "Micro Economics is the study of particular firm, particular household, individual prices, wages, incomes, individual industries and particular commodities."

Microeconomics is a branch of economics that studies the behaviour of individual households and firms in making decisions on the allocation of limited resources. Typically, it applies to markets where goods or services are bought and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services.

On the contrary, macroeconomics involves the "sum total of economic activity, dealing with the issues of growth, inflation, and unemployment." Macroeconomics also deals with the effects of national economic policies such as changing taxation levels.

According to Prof. Boulding, "Macro Economics deals not with individual quantities as such but with aggregates of the quantities, not with individual incomes but with the national income, not with the individual prices but with the price level, not with the individual output but with the national output."
The study of economics is divided by the modern economists into two parts viz. Micro economics and Macro economics. Micro economics and Macro economics, both the terms were used in 1933 by Prof. Ragnar Frisch from Oslo University of Norway. The word micro has been derived from the Greek word `Mikros' i.e. small and the word macro has been derived from Greek word `Makros' i.e. large.

According to Prof. K. E. Boulding, "Micro Economics is the study of particular firm, particular household, individual prices, wages, incomes, individual industries and particular commodities."

Microeconomics is a branch of economics that studies the behaviour of individual households and firms in making decisions on the allocation of limited resources. Typically, it applies to markets where goods or services are bought and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services.

On the contrary, macroeconomics involves the "sum total of economic activity, dealing with the issues of growth, inflation, and unemployment." Macroeconomics also deals with the effects of national economic policies such as changing taxation levels.

According to Prof. Boulding, "Macro Economics deals not with individual quantities as such but with aggregates of the quantities, not with individual incomes but with the national income, not with the individual prices but with the price level, not with the individual output but with the national output."