Though macro economics is essential in economic analysis and has a great practical and theoretical importance, it suffers from certain drawbacks or limitations. The main limitations of macro economics are (1) The macro economies deals with general welfare and disregards…

Macroeconomics occupies a significant place in economic analysis and has a lot of theoretical and practical importance. The importance of macro-economics can be understood from the following points: i) POLICY FORMULATION: Macroeconomics plays a very important role in formulating economic…

1) Unit of study / nature of analysis – Aggregate and Macroscopic. Macro-Economics deals with the study of Economy as a whole. It is concerned with the aggregate concepts such as National Income, National Output, National Employment, General level of…

The whole content of macroeconomic theory can be presented with the help of the following chart.

1] Prof Kenneth E Boulding, “Macroeconomics deals, not with individual quantities as such but with the aggregates of these quantities, not with individual incomes but with national income, not with prices but with the price level, not with individual output…

The term “macro” is derived from the Greek word “Makros” which means “large” Micro economics studies not the whole economy not a part of the economy. Macro economics is thus, the branch of economics which analyses the entire economy. It…

1] Unrealistic assumptions Micro economics is based on unrealistic assumptions, especially in case of full employment, laissez faire assumption which do not exist in reality. Even the behavior of an individual cannot be generalised as the behavior of all. Hence…

1] Individual behavior analysis Micro economics studies behavior of individual consumer or producer in a particular situation. 2] Resource allocation Resources are already scarce ie less in quantity. Micro economics explains  efficient allocation and utilisation of resources to produce various…

1] Unit of study / nature of analysis – Individualistic and Microscopic. Micro economics is a microscopic or in-depth study of individual firms, particular households, individual prices, wages, incomes, in detail. It is a study of subject matter from particular…