The word Economics is derived from the ancient Greek word oikonomia. The father of Economics has defined it as “an inquiry into the nature and causes of the wealth of nations.”Economics has two main branches - Microeconomics and macroeconomics. Where microeconomics deals with how the household and firms in different kinds of markets allocate resources to produce and consume goods, macroeconomics deals with the economy as a whole. It deals with various factors like national output, GDP, income, employment, interest rate, etc. Many economists have given their theories and viewpoints on how to deal with various economic problems. Both the branches are interdependent and complement each other.

What are households, producers etc. in an economy known as?

Both 1 and 2

The correct answer is Option 4: Both 1 and 2

By economic units or economic agents, we mean those individuals or institutions which take economic decisions. They can be consumers who decide what and how much to consume. They may be producers of goods and services who decide what and how much to produce. They may be entities like the government, corporation, banks which also take different economic decisions like how much to spend, what interest rate to charge on the credits, how much to tax, etc.