Difference between Microeconomics and Macroeconomics - Economics Notes Grade XI

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Difference between Microeconomics and Macroeconomics

Micro and macroeconomics, both are the branches of economics. On the one thing, microeconomics deals with individual facts, that is branches, flowers, leaf, etc. and on the other hand, macroeconomics deals with aggregate facts that are the whole tree. Both play an important role in the formulation of economic principles.

Microeconomics Macroeconomics
1. Micro is derived from the Greek word ‘micros’ which means small. 1. Macro is derived from the Greek word ‘macros’ which means large.
2. It is a study of individual economic variables like a firm, industries, consumers, etc. 2. It is a study of aggregate economic variable like total consumption, saving, etc.
3. It is based on partial equilibrium analysis, other things remaining the same. 3. It is based on general equilibrium analysis.
4. Laws and principles are based on assumptions. 4. Laws and principles are far from assumptions.
5. Evolution of microeconomics took place earlier than macroeconomics. 5. It evolved only after the publication of Keynesian’s book, ‘The theory of Employment, Interest, and Money’.
6. Market equilibrium is determined by individual market demand and supply. 6. Market equilibrium is determined by aggregate market demand and supply.
7. It is suitable to study the problems of an individual economic unit. 7. It is suitable to study the problem of the economy as a whole like the level of employment, income, etc.
8. It is a static economic analysis. 8. It is a dynamic economic analysis.
9. It is called price theory or value theory. 9. It is also called the theory of income and employment or Keynesian’s theory.
10. It has a very narrow scope that is an individual market, etc. 10. It has a very wide scope that is a country.

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