Question

The basic difference between macroeconomics and microeconomics is:_________.

a. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
b. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms.
c. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
d. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.

Answer 1

c. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

Step-by-step explanation:

Macroeconomics analyzes the behavior and performance of the entire economy. It examines all the aggregate indicators that influence economic performance. These factors inflation, unemployment rate, growth rate, and gross domestic product. The Government and other stakeholders use macroeconomic data to formulate policies aiming at directing the economy in the intended direction.

Microeconomics is the analysis of how firms and individual households allocate limited resources to satisfy unlimited wants. It studies how individuals make choices and how those choices affect the production and consumption of a product. Microeconomics is concerned with a single product or market, while macroeconomics deals with the whole economy.