•Microeconomics studies business decisions made on an individual level. A small business owner, for example, must consider all sorts of financial decisions in order to keep a business afloat and operating, such as the allocation of resources, and must follow the tax and state regulations created by the government. Price levels must also be determined with the help of supply and demand. A business owner must thus need to know how to appropriately compete in the business market by producing and selling the most products while keeping prices reasonably low. It is also important, in studying microeconomics, to study market failures and the circumstances that brought about the failures. Macroeconomics
•Macroeconomics studies economics on a national level, focusing on not just individual business practices, but entire industries and the behaviors of government economics. This enormous field of study involves two basic concepts: adjustments in national income and economic growth. The national income, debt levels, foreign trade rate, gross domestic product (or total economic spending) and unemployment rates are also all considered in the function of macroeconomics. Macroeconomics also invests considerable focus on fiscal and monetary policy. Fiscal policy enforces government taxation, spending and general revenue power. Monetary policy is defined by the monetary authority and power--such as in interest rates and supply of money--measured in order to sustain economic growth in a country.
Five Differences Between Macroeconomics and Microeconomics
Economics, as a whole, is the study that focuses on production, distribution and consumption of all goods and services within an economy. Microeconomics and macroeconomics are two categories within this subject that each focus on different aspects of the economy. Approach
•These two categories of economics each take a different approach when studying the...