- Microeconomics studies decisions of people and businesses.
- It looks at how individual economic agents allocate resources.
- It also studies prices of goods and services.
- Example: How an individual buys products with given money.
- Example: How a company maximizes production to lower prices.
- Macroeconomics studies the national economy as a whole.
- It examines total investment and consumption in the economy.
- It looks at how central banks manage money and interest rates.
- Example: How Gross Domestic Product (GDP) is affected by unemployment.
| Feature | Microeconomics | Macroeconomics |
|---|---|---|
| Focus | Individual economic agents (people, businesses) | National economy as a whole |
| Decisions | Allocation of resources, prices of goods/services | Total investment, consumption, money management |
| Examples | Individual purchasing choices, company production | GDP, unemployment rates, interest rates |