Difference Between Micro And Macro Economics Notes
We can divide the study of Economics into two parts:
Macro means extremely large. Macro
Economics is the study of the Economy as a whole. We study the behavior of
whole companies, A To Z, Industries like Cotton, Plastic, etc. and all
consumers. For Example we study the purchasing power of whole customers. We
Study the General Price Level of all industries. We study the productions of
all companies.
In Micro Economics, We study each
and every individual unit. For Example, we study individual consumption,
savings, incomes, etc.
But in Macro Economics, we study
the sum of the whole individual units. For Example, we examine Aggregate Consumption,
Aggregate Savings, Nation Income, GDP, Inflation, General Price Level, etc.
When we study Micro Economics, we
can say that there are possibilities that from the point view of an individual
unit, the economy looks good but from the whole Economy, it is actually not
good for the country. For Example, saving of an individual is good for his /
her personal use but it is not beneficial for the whole Economy because if the
country faces the depression period due to natural disasters like Earthquakes,
Floods, Political Crisis, etc. then savings of an individual increases
depression further for the whole economy.
While in Case of Macro Economics,
we can say that there are also assumptions that overall economy is stable but
individuals suffer a lot. For Example, When the general price level of basic
necessities of life increases, then the Aggregate Consumption of rich people
and big companies increase that stabilize the General Price Level but the poor
common men suffer a lot.
Similarities Between Micro And Macro Economics
The purpose of both Macro And Macro Economics is the same that is the study of the wealth for the welfare of human being. Provide a Solution for whole human being whether at Individual or Particular
Level or at Industry Level or General Level.
Relationship / Interdependence of Micro Economics And Macro Economics
Micro Economics And Macro Economics are two different approaches but integrate with each other. Ignoring any one of them can not give us the complete picture
of whole economic system. For Example, if we see that due to aggregate inflation or depression period, the overall the economy is not growing well, but in fact, there are still some of the strong individual unites that are performing
well and earning profits or even super profits, so then we can not say that the economy is very poor, so it is not accurate and actual stability of the whole system. Similarly during Boom Period, eventhough the whole economy
is growing well but still there are some firms which are dead or even close to shutdown. So, we take into account both approaches at micro and macro level to address the economic problems correctly and stabilize the economy in a more better way.
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