The reason is that there are numerous items in a group, which are sometimes not possible to measure separately. Importance in Special Areas The fields of international trade, national income, national investment are such areas where only macro approach applies not micro economics.
For example, an individual can withdraw the amount saved in a bank at a time but if all individuals do the same, the banks will have to close down. Helpful in Monetary Policies Many monetary problems, like, inflation and deflation etc.
Difficulty in Measuring Aggregates Under macro economics, measurement of aggregates becomes very difficult. Helpful in Understanding Paradoxes It is necessary-to take the help of macro economics in understanding the situation under paradoxes because sometimes conclusions drawn-for individual units are not appropriate from the point of view the whole economy.
Danger in Ignorance of Individual Units When we study a group under macro economics, there is always a danger that we may ignore the numerous individual units which form the group. Thus, in Macro Economics, either the whole economy is studied or those big units which are related to the economy as a whole.
Definition In the words of Prof. For example, it may be -possible that them is no change in the population of a country but the size of the families in that country getting bigger or smaller.
Difference Between Micro and Macro Economics: Difference Between Micro and Macro Mohd Sadiq Comments 0 Comment Difference Between Micro and Macro Economics Micro and Macro economics, both are absolutely vital and a person is only half educated it he understand the one, while being ignorant of the other.
Mehta, micro economics is like an open economy whereas, macro economics is like a closed economy because knowledge about-an individual person or a firm can be easily gained but a lot of time and problems will be faced in gaining knowledge about the entire society Sometimes, economic activities are changing from the point of view of an individual micro but are stable from the point of view of a group macro.
Importance and Merits of Macro Economics Importance in Planning Macro economies has played a very important role in determining the policies of the modern planning era. Limitations and Demerits of Macro Economics No importance to Individual Units Under macro economics, in comparison to individual units, a group of units is given more importance.
Using micro approach, the individual units are studied, like, the study of a firm or an industry, whereas, using macro approach, the whole of the economy is studied, like national income, national investment etc. But it is not necessary that what is right for individual person, would also right for a group.
On this basis quick changes take place in micro individual economics, whereas comparatively slow changes take place in macro group economics. Boulding Macro Economics deals not with individual quantities as such but aggregates of these quantities, not with individual incomes but national income, not with individual output but with national output.
Thus, macro economics studies the various groups related to the whole economy, like, national savings, national income, national consumption, total employment, total production, etc.
Under micro economicsa perishable individual, consumer or a firm is studied whereas in macro the imperishable or undying society is studied. For example, individual savings is a. In the view of Prof Samuelson There is not really any opposition between micro and macro, both are absolutely vital and a person is only half educated it he understand the one, while being ignorant of the other.
It acts as a pathfinder in the determination of economic policies.Free Essay: Economics Section A Midterm Exam October 24, Question One (20 marks) Jennifer 's preferences for hot sandwiches and cold sandwiches can. Macro Economics. Printer Friendly.
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Macro Economics deals not with individual quantities as such but aggregates of these quantities, not with individual incomes but national income.
Exam Notes Notes For Students. Macro Economics – Importance, Limitations and Difficulties Macro Economics – Importance, Limitations and Difficulties.Download