Define macroeconomics and microeconomics?
Macroeconomics is a branch of economics that studies the behavior and performance of an economy as a whole. It focuses on aggregates and averages of economic indicators such as GDP, inflation, unemployment rate, and economic growth. Macroeconomics analyzes the factors that influence the overall health and stability of an economy, such as government policies, monetary and fiscal policies, international trade, and global economic trends.
Microeconomics, on the other hand, is a branch of economics that studies the economic behavior and decision-making of individual units such as households, firms, and industries. It examines the factors that shape individual choices and interactions in resource allocation and market behavior, including supply and demand dynamics, price determination, consumer behavior, production theory, and market structures. Microeconomics provides insights into how individuals make decisions with limited resources and how they respond to changes in prices and incentives.