Which one of the following is the principle difference between microeconomics and macroeconomics?
Answer & explanation
Correct answer: option 3
The Correct Answer is option 2: Both 1 and 2
The subject matter of economics has been studied under 2 broad branches: Micro economics and macroeconomics.
In microeconomics, we study the behaviour of individual economic agents in the markets for different goods and services and try to figure out how prices and quantities of goods and services are determined through the interaction of individuals in these markets.
In macroeconomics, on the other hand, we try to get an understanding of the economy as a whole by focusing our attention on aggregate measures such as total output, aggregate demand, employment and aggregate price level.