In this blog, we are going to tell you what is economics and their two branches microeconomics, and macroeconomics and what is the difference between these two. This is a topic that is very important for the students of Economics to know about it.
Both microeconomics and macroeconomics are branches of economics, so we first need to know what economics is. Both micro and macro help to explain economics in detail.
Overview Of Economics
When you hear the word Economics, May comes to your mind that Economics means Stock Market, Investment, or any other thing which is related to money. Some parts of economics are related to finance, but let us tell you that economics is the most different and very interesting thing.
So if we start with the Meaning of Economics, it starts with the word Scarcity. Scarcity means lack, our resources are limited and our wants are unlimited, so we cannot satisfy our every wants because our resources are limited.
For example, money, suppose you need both mobile and laptop things, but you have money to buy only one thing, then you will be confused to choose from laptop or mobile. Even if we have the money to buy both things, we still have to choose. So basically we mean that there is no unlimited money for our unlimited wants. Economics also works on this concept, people have to take decisions, they have scarce resources for them.
Not just people, this situation has to be faced by every business, government, and country. While dealing with resources, economics has to face three problems what to produce, how to produce and from whom to produce
There was an economist from Norway named Ragnar Anton Kittil Frisch. In the year 1933, he divided economics into two parts. To facilitate the study of economics in two parts, divide microeconomics and macroeconomics. Both of these economics had general principles that are considered to be general principles within both parts.
When we talk about microeconomics, the word micro is derived from the Greek word Mikros, which means small and individual. By its name, we know that this Whole does not explain economics, but rather its small unit or a unit. If we talk about the economic behavior of a person, then it will be called part of microeconomics.
Economic behavior means that the consumption, demand, supply made by a person, investment whatever they do, their economic behavior which represents an individual are considered part of microeconomics.
In microeconomics, the economy of a single person or a particular place is talked about. Microeconomics talks about the economy of a single person or a particular market at a very small level.
Some important topics of microeconomics
- Demand, Supply, And Equilibrium
- Measurements Of Elasticity’s
- Demand Theory
- Theory Of Production
- Theory Of Costs
- Welfare Economics
Macroeconomics is the study of the whole economy. It looks at ‘aggregate’ variables, such as aggregate demand, national output, and inflation. Now we are going to talk about macroeconomics when we study the economic behavior of the entire economy rather than one person. We are not studying this one person’s economic behavior and not their demand and supply, but we study the economic behavior of all the people in the entire economy, how their behavior as a whole Let’s talk about macroeconomics.
When we study the economic behavior of a country by them, their national income is studying GDP, then all this is called macroeconomics. Similarly, if we talk about the whole world and try to understand what kind of economic conditions are going on in the whole world, then this kind of study is done under macroeconomics.
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Some important topics of macroeconomics
- Growth Models
- National Income
- Monetary Policy
- Fiscal Policy
- Inflation And Deflation
Difference Between Microeconomics And Macroeconomics
Economics is divided into two parts: Microeconomics and Macroeconomics. These two parts are not dependent on each other. In microeconomics, only one small and particular economy is studied, while in macroeconomics the whole economy is studied like the country, world, etc. Now we are going to tell by giving some points of difference between microeconomics and macroeconomics.
- Microeconomics studies in a small and particular market in the economy.
- Macroeconomics studies the whole economy that covers big areas of markets.
- Microeconomics deals with many issues like demand, supply, production, consumption, etc.
- Macroeconomics deals with many issues like national income, fiscal policy, banking, inflation, and deflation, etc.
- Microeconomics applies to domestic issues.
- Macroeconomics applies to outer issues.
- In microeconomics, price is the main determinant.
- In macroeconomics, income is the main determinant.
- Microeconomics prices of factors of production (labor, land, entrepreneur, capital, etc) within the economy.
- Macroeconomics solves the major issues of the economy like deflation, inflation, rising prices (reflation), unemployment, and poverty as a whole.
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- Microeconomics based on impractical presuppositions.
- Macroeconomics sometimes fails to prove accurate because it is feasible that what is true for aggregate (comprehensive) may not be true for individuals too
In this blog, we have explained what is Economics and Economics is divided into two parts namely Microeconomics and Macroeconomics. We have explained both of these in detail and we have also learned the difference between these two in this blog. Differentiate between microeconomics and macroeconomics will be defined well.
Hopefully, with the help of this blog, all your confusion will be removed and topics like Microeconomics vs Macroeconomics can also be read and understood. Moreover if you need any help with Economics, then you can discuss it with our experts and get Economics Assignment Help online at very low prices.