Friday, November 30, 2012



The study of Economics can be clssified under 2 groups - Macroeconomics and Microeconomics

(a) Microeconomics - It observes the individual economic behaviour of consumers, businesses, households etc. to analyse how they make decisions under scarcity of resources and what is the effect of those decisions.

In short, we can say this branch of Economics studies the market behavior of individual consumers and businesses in order to understand and analyze their decision making process.It focuses on Production/output in individual industries and businesses and consumer behavior.

(b) Macroeconomics - In comparison to Microeconomics, Macroeconomics looks at the big picture, for eg. the National Economy as a whole.

It studies Economy as a whole and is involved in the evaluation and prediction of -

1. National Output/production

2. Employment

3. Balance of Payment (BOP)

4. Gross Domestic Product (GDP)

5. Inflation

6. Poverty

7. Price-levels