The Difference Between Micro and Macro Economics

To distinguish microeconomics from macroeconomics the difference is to think about the names of these two fields. Microeconomics is the study of economics on a smaller, more detailed scale. Macroeconomics is that it is the study of economics on a larger, broader scale. Microeconomics looks at the behavior of individual people and companies within the economy. It is based on the idea of a market economy and the basic laws of supply and demand. Microeconomics also examines how the decisions of individuals impact specific industries. Another basic principle of microeconomics is the study of the actions of businesses to earn a profit. Macroeconomics on the other hand is focused on the collective behavior of the economy as whole not just specific companies. Macroeconomics also focuses on the Gross National Product (GDP) and how it affects changes in unemployment, national income, rate of growth, and price levels. Even though the two studies differ they actually compliment one another on the different issues in each field of study. Both micro and macroeconomics are necessary for understanding how companies earn profit and how the economy is operated. Despite of having some dissimilarities Micro economics and Macro economics both are important and need to be understood to have a full knowledge of economics. To understand national economy is important but it is also necessary to understand the household economy and the firm's economy to set a nations economic policy and have the same importance. Because aggregated household economy and the firm's economy is the macroeconomics but this two branches should have proper combination in the policy so that they can support each other. We should know the differences but should not give our full focus on the differences. We should have combined knowledge on these two branches of economics.