The major differences between Microeconomics and Macroeconomics - IBB Banking Diploma Tutorial

The major differences between Microeconomics and Macroeconomics are as follows:

Microeconomics:

1. It is the study of individual economic units of an economy.

2. It deals with Individual Income, Individual prices, Individual output, etc.

3. Its central problem is price determination and allocation of resources.

4. Its main tools are demand and supply of a particular commodity/factor.

5. It helps to solve the central problem of ‘what, how and for whom’ to produce. In the economy

6. It discusses how equilibrium of a consumer, a producer or an Industry Is attained.

7. Price is the main determinant of micro- economic problems.

8. Examples are: Individual Income, Individual savings, price determination of a commodity, individual firm’s output, consumer’s equilibrium.

Macroeconomics:

1. It is the study of economy as a whole and its aggregates.

2. It deals with aggregates like national Income, general price level, national output, etc.

3. Its central problem is determination of level of Income and employment.

4. Its main tools are aggregate demand and aggregate supply of the economy as a whole.

5. It helps to solve the central problem of full employment of resources in the economy.

6. It is concerned with the determination of equilibrium level of Income and employment of the economy.

7. Income is the major determinant of macroeconomic problems.

8. Examples are: National Income, national savings, general price level, aggregate demand, aggregate supply, poverty, unemployment, etc.