Question

Compare and contrast microeconomics and macroeconomics. How do the two approaches interrelate? Use a specific example to explain your rationale.

Answer 1

Answer: Macroeconomics is wider concept than microeconomics.

Explanation: Macroeconomics is the study of an economy as whole. It is focused on factors like national productivity etc. Whereas, microeconomics is the study of individuals and firms in an economy.

For example - Macroeconomics studies the reasons behind changing interest rates in a country while microeconomics studies its impact on the individuals and firms in the economy.

Thus, both the branches are inter- related as both studies the same subject but the factors they analyze are different.