Question

• Explain the difference between macroeconomics and microeconomics. Give examples of the areas of concern for each branch of economics. How are macro and microeconomics interrelated? 250 words minimum

Answer 1

Economics is the study of human behavior with the goal of improving the environment and society around us. The textbook also defines macroeconomics as the study of economics as a large interactive system. Macroeconomics approaches the economy as a complete system with feedback effects among the sectors that determine national economic performance concerning output, employment, and prices. In other words, macroeconomics is the study of how different aspects of the economic effect, react and are connected to each other.
On the other hand, microeconomics is not only the study of economics and human influences on the economy as an interactive system but also the study of individual behavior specifically in the context of scarcity (limited supply) of time, money, and energy. In other words, how different choices can have an effect on behavior, economy, and society and how the lack of one resource has a domino effect on all other economic factors relating to each other.
Both microeconomics and macroeconomics are focused on economics, the difference between the two is that macroeconomics is the broad study of the economic factors and how different aspects of the economic system works together and provide feedback for each other to make a well-polished integrative system whereas microeconomics is the study of a specific branch of economics, the effects of specific choices with the idea of scarcity in mind and how those choices relate to and have an effect on the environment around it.