Briefly describe how Macroeconomics differs from Microeconomics.

Expert Solution

Microeconomics is the study of how individuals and businesses make their choices and allocate their resources based on the price of goods and services. Microeconomics is the study of the supply in an economy which determines the price level in the market. It is a bottom up approach used to analyze the economy. The major components of microeconomics are : demand, supply, production theory, costs of production and labor economics.

Macroeconomics, on the other hand, is concerned with how the policies of one country can affect others and how the economy functions at a macro level. It studies the whole economy and the various sectors in an economy. Macroeconomics deals with various issues such as unemployment, inflation rate, general price level, money, etc. It is top down approach to understand what all to do with an economy and how the economy is functioning.

Rahul Sunny answered 2 years ago

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