Economics is the branch of social studies that deals with study associated with the production, distribution, and consumption of goods and services. Economics explains the way people interact within the market to achieve some specific goals or interests.
Micro-Economics: Micro-Economics is a branch of economics that deals with the studies of the behavior of the individuals as well as the firms in making different decisions associated with the allocation of the scarce resources and the interactions of the individuals with the firms and vice verse. In Simple words, microeconomics deals with the decisions taken on a much smaller scale like for example the decisions made by a customer at a store or the number of things that will be manufactured by a store.
Microeconomics gives a detailed analysis of the free market economy with its millions of customers and producers who work together and decide about the allocation of various productive resources among different goods and services.
Which goods can be purchased?
In what way it can produce?
From whom they should be purchased?
The importance of Microeconomics:
Paves a way to analyze and frame various economic policies.
This helps in a better understanding of the level of satisfaction demanded by the customers.
It the most convenient way to analyze the various conditions of economic welfare.
Macro-Economics: Macroeconomics mainly focuses on general or large scale economic factors. They analyze economy-wide data which includes GDP (Gross Domestic Product), unemployment, interest rate, and national productivity.
The importance of macro-Economics are discussed below:
It helps in the proper analysis of the economic system.
Macro-Economics paves a way to formulate different economic policies.
Macro-Economics helps in a better understanding of the Micro-Economics. The laws associated with Micro-Economics cannot be framed without proper knowledge about the aggregates which are a part of the Macro-Economics.
With proper knowledge and understanding in Macro-Economics, the economic fluctuations can be easily controlled.
One of the most critical aspects of Macro-Economics is that it provides a base to study and know the effects of inflation and deflation on the economy.
Macro-Economics helps in the proper analysis of the National Income and social accounts.
With proper analysis in Macro-Economics, the Economic Development of a country can be understood in a better way.
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