Difference between Micro and Macro Economics

Difference Between Micro and Macro Economics

Get the difference between Microeconomics and Macroeconomics in a tabular form here. This comparison is based on various factors, such as the central approach to solving problems, uses, definitions, etc.

Microeconomics vs Macroeconomics

Difference Between Microeconomics and Macroeconomics
Basis	Macroeconomics	Microeconomics
Definition	It strives to examine the economy as a whole and comprises diverse market segments.	Concentrating on a personal level, Microeconomics studies a detailed market segment in a country’s economy.
Central Approach	Takes a comprehensive approach by examining the whole economy.	It is an individual-centric practice concerned with companies and families and studies customer behaviour, resource distribution, and human preferences.
Concerned with	Also known as the income theory because it represents the changing groups of nationwide revenue of an economy during a specific time.	Also known as the price theory deals with factor pricing, such as interest, rent, wage, profits, etc., for land, capital, labour, and company and explains how diverse prices are fixed.
Uses	It is an analytical tool used to craft fiscal and national economic policy.	Potential investors can use it to make their decisions.
Factors	National income, distribution, employment, GDP, general price level, money, etc., are Macroeconomics factors that create a major difference between Micro and Macro Economics.	Demand, factor pricing, supply, product pricing, production, consumption, economic welfare, etc.

Micro and Macro Economics

While both Microeconomics and Macroeconomics are interdependent and complete one another, they are fundamentally distinct. The strategy and the purpose of both economic sections are where the differentiations occur.

What is Microeconomics?

Microeconomics is a fundamental branch of economics that examines the behaviour of people and companies. Further, it concentrates on how conclusions are made based on the distribution of finite resources. It explores the demand and supply pattern and determines outcomes and costs in individual markets.

Key Components of Microeconomics

• Production theory: This hypothesis proposes studying how services and goods are manufactured or assembled.
• Demand, Equilibrium, and Supply: Prices are determined by the regulations of supply and demand. Under this process, vendors give the same rate or cost as required by customers or buyers in a completely competitive industry. It creates an economic equilibrium between supply and demand.
• Production costs: This regulation defines the cost of goods and services specified by the cost of the supplies employed during the production stage.

What is Macroeconomics?

‘Macro’ emanates from the Greek phrase ‘Makro’ (meaning “enormous”). When combined with economics, this unit deals with the performance, production, behavior, design, and decision-making of a country’s economy as a blend of all commodities rather than individual companies or markets.

Key Components of Macroeconomics

• Gross Domestic Product (GDP): Being one of the principal indicators, GDP (Gross Domestic Product) is employed to measure the strength of a country’s economy. GDP is the monetary value of all the finished services and goods rendered within a nation’s borders.
• National Income: It is a financial indicator that defines the accurate portrayal of the economy and buying capacity of individuals in the country. It means the sum of earnings, salaries, pension payments, and interest rents to citizens of the country.
• Unemployment: This aspect describes the measurement of unemployment of individuals in the nation, and the price at which individuals look for employment or jobs is the unemployment rate.

Conclusion:

Key Difference Between Micro and Macro Economics

The key difference between Micro and Macro Economics is that the former deals with the supply and demand of goods, and individual decisions related to production, consumption, and utility, while the latter deals with the economy as a whole by making predictions about the national income, formulating policies, etc.

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