Microeconomics & Macroeconomics


Differentiate between microeconomics and macroeconomics


differentiate between microeconomics and macroeconomics

Microeconomics deals with matters that are relatively smaller in scale. It pertains to independent people, companies and so on, whereas macroeconomics deals with various factors that make an impact nationally and globally.

  • Microeconomics is the study of markets based on buying and selling of goods. Market analysis is done to ascertain the interplay between demand and supply. This brings clarity to allocate the available resources that are in short supply, among the multiple stakeholders of the society. Producers are the beneficiaries of this analysis as they get to know what to make and how to price their products appropriately. Microeconomics engages in reaping profits for the companies and at the same time ensures in getting good returns for the consumers and producers as well. Any variation in the market scenario is analyzed. Wages for labourers, their demand and supply and the way consumers behave are covered by microeconomics.
  • Macroeconomics looks at major policies that influence the national economy. Studies conducted for macroeconomics involves analyzing the reasons for unemployment and rate of inflation. Supply of money in an economy is determined by the monetary policies of a nation. This reflects in interest rates and rate of inflation. Rate of poverty has a direct correlation to a nation’s economy. Therefore, higher income levels or increase in employment opportunities decrease poverty rates.

Both microeconomics and macroeconomics are dependent on each other. Anything that destabilizes microeconomics has a direct impact on macroeconomics. For example, an increase in tax could lead to lesser consumption due to increase in prices.


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