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Microeconomics |
Macroeconomics |
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1. It is that branch of
economics which deals with the economic decision-making of individual
economic agents such as the producer, the consumer, etc |
1. It is that branch of
economics which deals with aggregates and averages of the entire economy,
e.g., aggregate output, national income, aggregate savings and investment,
etc. |
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2. It takes into account
small components of the whole economy. |
2. It takes into
consideration the economy of any country as a whole. |
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3. It deals with the
price-determination in case of individual products and factors of production. |
3. It deals with general
price-level in any economy. |
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4. It is known as price
theory (since it explains the process of allocation of economic resources
along alternative lines of production on the basis of relative prices of
various goods and services). |
4. It is also known as
the income theory (since it explains the changing levels of national income
in any economy during any particular time period). |
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5. It is concerned with
the optimisation goals of individual consumers and producers (e.g.,
individual consumers are utility-maximisers, while individual producers are
profit-maximisers). |
5. It is concerned with
the optimisation of the growth process of the entire economy. |
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6. It studies the flow of
economic resources or factors of production from any individual owner of such
resources to any individual user of these resources, etc. |
6. It studies the
circular flow of income and expenditure between different sectors of the
economy (say, between the firm sector and household sector). |
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7. Microeconomic theories
help us in formulating appropriate policies for resource allocation at the
firm level. |
7. Macroeconomic theories
help us in formulating appropriate policies for controlling inflation (i.e.,
rising price-level), unemployment, etc. |
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8. It takes into account
the aggregates over homogeneous or similar products (e.g., the supply of
steel in an economy). |
8. It takes into account
the aggregates over heterogeneous or dissimilar products (say, the Gross
Domestic Product of any country during any year. |