- Some economist believe that in order to really understand macroeconomics, you must first understand microeconomics....

- Some economist believe that in order to really understand macroeconomics, you must first understand microeconomics. How does microeconomics relates to macroeconomics?

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Expert Solution

Economics is broadly divided into two parts Micro Economics and Macro Economics.The word Micro economics is derived from the Greek word Mikros which means single,unit.Macro economics is derived from the Greek word Makros which means large,total,aggregate.

Micro Economics studies individual person,household , firm ,a products price.On the other hand Macro Economics studies aggregate demand,aggregate supply,national income.Micro Economics in simple words studies the smallest part of the economy and Macro Economics studies the economy as a whole.Its like Micro Economics studies a single tree and Macro Economics studies the whole forest.Micro Economics and Macro Economics are inter-related .One cannot deny the relationship between both , for example micro studies individual income ,single products price,single firm whereas macro studies national income, price level, industries.Know no one can deny the fact that these variables studied by micro and macro are not related.Thus,we can also observe the interdependence of these economic variables.

Rahul Sunny answered 1 year ago

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