Question

What Macro and Micro have in common, and how do they differ? Is it possible for any country to have strong Macro and weak Micro, or otherwise? Give examples of the key topics covered by Macro and Micro.

Answer 1

The macro economics is defined as concerned about an economy as a whole whereas micro economics takes into consideration the smaller units of the macro economics itself. Thus, micro economics is a smaller version and combining many micro leads to macro. These both concepts are similar in every respect as the basic concepts of economics apply to both of these irrespective of their size. For example, the laws of demand and supply, price elasticity of demand, price mechanisms, and clearing house functions of the economies take place in both these. The only difference amongst is their size. The macro economics deals with the economy as a whole whereas the micro economics deals with smaller units which could be a household or a market. That's why the demand in macro is denoted as aggregate demand and in micro, it is denoted as market demand or individual demand. Yes, it is possible that an economy can have a weak micro and strong macro as well as strong micro and weak macro depending on the economic determinants of both these. If an economy has a strong micro, then it is possible that some of its parts could be having weak micros but not all of them. Similarly, a number of strong micros but conflicting coordination would lead to weak macro. The microcincepts are denoted by micro units such as market and individual demand, supply, and investment etc. whereas the macro concepts are denoted by aggregate demand, supply, and investment etc..