Difference Between Macroeconomics and Microeconomics
The difference between microeconomics and macroeconomics is that the first speaks of the particular, while the second of the whole. They are the two main branches of the economy .
Macroeconomics and microeconomics are two very popular concepts in economics. One of the first curiosities of those who enter the economic world is to know its difference.
What is the difference between macroeconomics and microeconomics?
To see the difference, just separate the two words. Micro-Economics and Macro-Economics. The words macro and micro come from the Greek. Macro means big and micro means small.
Therefore, macroeconomics is the economy of the big and microeconomics is the economy of the small.
What do macroeconomics and microeconomics study?
Microeconomics studies individual variables. That is, the behavior of economic agents separately. For example, a consumer's decision to buy a mobile is studied by microeconomics. Another example would be the decision of a company to invest or not to invest or the study on the benefit of a specific company.
Macroeconomics studies what we know in economics as aggregate variables. That is, variables that are the sum of many small variables. For example, gross domestic product (GDP) is a macroeconomic variable. Simplifying, if we have 10 people in a country and each one produces 2 units, the GDP will be 20 units. The production of each of the 10 people (2 units) is studied by microeconomics, while the sum of all is studied by macroeconomics.
Examples of macroeconomic and microeconomic variables
Next, we show examples of variables in macroeconomics and microeconomics.
Examples of variables in macroeconomics:
- Gross Domestic Product (GDP) .
- inflation .
- Unemployment .
- Balance of payments .
- Private debt .
- Public debt.
- public deficit .
- inflation .
- Unemployment rate .
There are many more, but the above variables are some of the best known.
Examples of variables in microeconomics:
- production of a company.
- Debt of a company.
- Expenditure of a company.
- Household consumption.
- Salary of a worker.
- Preferences of a consumer.
- Consumer tastes.
- Personal savings.
- Amount of a personal investment.
- Risk aversion.