1.

Distinguish between Micro and Macro Economics.

Answer»

Micro and Macro economics are distinguished on the following grounds: 

Scope: Micro Economics studies in individual units so its scope is narrow. Macro Economics studies in aggregates, so its scope is wider. 

Method of study: Micro economics follows slicing method as it studies individual unit Macro Economics follows lumping method as it studies in aggregates.

Economic Agents: In Micro Economics, each individual economic agent thinks about its own interest and welfare. In Macro Economics, economic agents are different among individual economic agents and their goal is to get maximum welfare of a country.

Equilibrium: Micro economics studies the partial equilibrium in the country. Macro Economics studies the general equilibrium in the economy.

Domain: Micro economics consists of theories like consumer’s behaviour, production and cost Rent. Wages, Interest, etc.

Macro economics comprises of theory of income, output and employment. Consumption function, Investment function, Inflation, etc.



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