SlideShare una empresa de Scribd logo
1 de 20
Descargar para leer sin conexión
Gandhinagar institute of technology
 Sub – Engineering Economics & Management
 Topic – Difference between micro & Macro Economics
 Guided by – Prof. Prashant Pandya
 Sem – 3rd
 Branch – Electrical (b3)
 Academic year – 2015&2016
Prepared by
 Shah Raj .S. (140120109054)
 Abhishek Chokshi(140120109005)
 Himal Desai (140120109008)
Difference Between Micro &
Macro Economics
Index
 Introduction
 Concerned
 Differences between micro & macro
 Similarities between micro & macro
Introduction
 Microeconomics is the study of particular markets, and
segments of the economy. It looks at issues such as
consumer behaviour, individual labour markets, and the
theory of firms.
 Macro economics is the study of the whole economy. It
looks at ‘aggregate’ variables, such as aggregate demand,
national output and inflation.
  
Concerned
-Microeconomics
 Micro economics is concerned with:
 Supply and demand in individual markets
 Individual consumer behaviour. e.g.
Consumer choice theory
 Individual labour markets – e.g. demand for labour,
wage determination
 Externalities arising from production and consumption.
Concerned-
Macroeconomics
 Macro economics is concerned with
 Monetary / fiscal policy. e.g. what effect does interest rates have on
whole economy?
 Reasons for inflation, and unemployment
 Economic Growth
 International trade and globalisation
 Reasons for differences in living standards and economic growth
between countries.
 Government borrowing
Moving from Micro to
Macro
 If we look at a simple supply and demand diagram for
motor cars. Microeconomics is concerned with issues
such as the impact of an increase in demand for cars.
 This micro economic analysis shows that the increased
demand leads to higher price, and higher quantity.
Difference between micro & Macro Economics
Macro economic analysis
 This looks at all goods and services produced in the economy.
 The macro diagram is looking at Real GDP (which is the total
amount of output produced in the economy) instead of quantity.
 Instead of the price of a good, we are looking at the overall price
level (PL) for the economy. Inflation measures the annual % change
in the aggregate price level.
 Macro diagrams are based on the same principles as micro
diagrams, we just look at Real GDP rather than Quantity and
Inflation rather than Price Level (PL)
Difference between micro & Macro Economics
 We can also consider differences between micro and
macro economics. I will summarise the main differences
here:
 Small segment of economy vs whole aggregate economy.
 Microeconomics works on principle that markets soon
create equilibrium. In macro economics, the economy
may be in a state of disequilibrium (boom or recession)
for a longer period
 There is little debate about the basic principles of micro-
economics. Macro economics is more contentious. There
are different schools of macro economics offering
different explanations (e.g. Keynesian, Monetarist,
Austrian, Real Business cycle e.t.c).
 Macro economics places greater emphasis on empirical
data and trying to explain it. Micro economics tends to
work from theory
Differences Between
Microeconomic
andMacroeconomics
 The maindifference is that micro looks at small segments, and
macro looks at the whole economy. But, there are other differences.
 Equilibrium – Disequilibrium
 Classical economic analysis assumes that markets return to
equilibrium (S=D). If demand increases faster than supply, this
causes price to rise and firms respond by increasing supply. For a
long time, it was assumed that the macro economy behaved in the
same way as micro economic analysis. Before, the 1930s, there
wasn’t really a separate branch of economics called
macroeconomics
 Great Depression and Birth of Macroeconomics
 In the 1930s, economies were clearly not in equilibrium. There
was high unemployment, output was below capacity, and
there was a state of disequilbrium Classical economics
didn’t really have an explanation for this dis-equilibrium,
which from a micro perspective, shouldn’t occur.
 In 1936, J.M.Keynes produced his The General Theory of
Employment, Interest and Money, this examined why the
depression was lasting so long. It examined why we can be in
a state of disequilibrium in the macro economy`
 Keynes observed that we can have a negative output gap
(disequilibrium in the macroeconomy) for a prolonged time.
In other words, microeconomic principles of markets clearing,
didn’t necessarily apply to macro economics. Keynes wasn’t
the only economist to investigate this new branch of
economics.
 For example, Iriving Fisher examined the role of debt
deflation in explaining the great depression. But, Keynes’
theory was the most wide ranging explanation, and played a
large role in creating the new branch of macro-economics.
 Since 1936, macroeconomics developed as a separate
strand within economics. There have been competing
explanations for issues such as inflation, recessions and
economic growth.
Similarities between
Microeconomics and
Macroeconomics
 Although it is convenient to split up economics into two
branches – microeconomics and macroeconomics, it is to
some extent an artificial divide.
 Micro principles used in macro economics. If you study
impact of devaluation, you are likely to use same
economic principles, such as the elasticity of demand to
changes in price.
 Micro effects macro economics and vice versa. If we see a rise
in oil prices, this will have a significant impact on cost-push
inflation. If technology reduces costs, this enables faster
economic growth.
 Blurring of distinction. If house prices rise, this is a micro
economic effect for housing market. But, housing market is so
influential that it could also be considered a macro-economic
variable, and will influence monetary policy.
 There have been efforts to use computer models of household
behaviour to predict impact on macro economy.
THANK YOU

Más contenido relacionado

La actualidad más candente

Classical vs keynesian theory
Classical vs keynesian theoryClassical vs keynesian theory
Classical vs keynesian theoryRyan Reardon
 
Macroeconomics slide
Macroeconomics slideMacroeconomics slide
Macroeconomics slideThao Nguyen
 
classical vs keynesian economics
classical vs keynesian economicsclassical vs keynesian economics
classical vs keynesian economicsRahul Şınğh
 
Difference between macro and micro economics
Difference between macro and micro economicsDifference between macro and micro economics
Difference between macro and micro economicsMaddali Swetha
 
Introduction to macroeconomics
Introduction to macroeconomicsIntroduction to macroeconomics
Introduction to macroeconomicsShivam Bindra
 
1.intro to microeconomics
1.intro to microeconomics1.intro to microeconomics
1.intro to microeconomicsnysa tutorial
 
Scale of production
 Scale of production Scale of production
Scale of productionBikash Kumar
 
B-COM Part 1 Economics
B-COM Part 1 EconomicsB-COM Part 1 Economics
B-COM Part 1 EconomicsKhalid Aziz
 
Nani intro to macroeconomics
Nani intro to macroeconomics Nani intro to macroeconomics
Nani intro to macroeconomics Vikram g b
 
Neo classical theory of interest
Neo classical theory of interestNeo classical theory of interest
Neo classical theory of interestRitika Katoch
 
Instrument To Control Business Cycle
Instrument To Control Business CycleInstrument To Control Business Cycle
Instrument To Control Business CycleMervin Felix Caleb
 
Microeconomics meaning, definition nature and scope
Microeconomics meaning, definition nature and scopeMicroeconomics meaning, definition nature and scope
Microeconomics meaning, definition nature and scopeMarwadi University Rajkot
 
A History of Macroeconomics.
A History of Macroeconomics.A History of Macroeconomics.
A History of Macroeconomics.keshu91
 

La actualidad más candente (20)

Classical vs keynesian theory
Classical vs keynesian theoryClassical vs keynesian theory
Classical vs keynesian theory
 
Macroeconomics slide
Macroeconomics slideMacroeconomics slide
Macroeconomics slide
 
Classical theory of employment
Classical theory of employmentClassical theory of employment
Classical theory of employment
 
classical vs keynesian economics
classical vs keynesian economicsclassical vs keynesian economics
classical vs keynesian economics
 
Difference between macro and micro economics
Difference between macro and micro economicsDifference between macro and micro economics
Difference between macro and micro economics
 
Introduction to macroeconomics
Introduction to macroeconomicsIntroduction to macroeconomics
Introduction to macroeconomics
 
New keynesian economics
New keynesian economicsNew keynesian economics
New keynesian economics
 
Effective demand
Effective demandEffective demand
Effective demand
 
Physiocarcy
PhysiocarcyPhysiocarcy
Physiocarcy
 
1.intro to microeconomics
1.intro to microeconomics1.intro to microeconomics
1.intro to microeconomics
 
Scale of production
 Scale of production Scale of production
Scale of production
 
B-COM Part 1 Economics
B-COM Part 1 EconomicsB-COM Part 1 Economics
B-COM Part 1 Economics
 
Micro vs macro economics
Micro vs macro economicsMicro vs macro economics
Micro vs macro economics
 
Nani intro to macroeconomics
Nani intro to macroeconomics Nani intro to macroeconomics
Nani intro to macroeconomics
 
Business cycle
Business cycleBusiness cycle
Business cycle
 
Macro Economics
Macro EconomicsMacro Economics
Macro Economics
 
Neo classical theory of interest
Neo classical theory of interestNeo classical theory of interest
Neo classical theory of interest
 
Instrument To Control Business Cycle
Instrument To Control Business CycleInstrument To Control Business Cycle
Instrument To Control Business Cycle
 
Microeconomics meaning, definition nature and scope
Microeconomics meaning, definition nature and scopeMicroeconomics meaning, definition nature and scope
Microeconomics meaning, definition nature and scope
 
A History of Macroeconomics.
A History of Macroeconomics.A History of Macroeconomics.
A History of Macroeconomics.
 

Destacado

2 introduction to microeconomics and macroeconomics
2 introduction to microeconomics and macroeconomics2 introduction to microeconomics and macroeconomics
2 introduction to microeconomics and macroeconomicsPrem Raj Bhatta
 
Ch. 1 micro and macro economics
Ch. 1 micro and macro economicsCh. 1 micro and macro economics
Ch. 1 micro and macro economicsManish Purani
 
micro & macro economics
micro & macro economicsmicro & macro economics
micro & macro economicsgilda_girish
 
Explain the difference between microeconomics and macroeconomics
Explain the difference between microeconomics and macroeconomicsExplain the difference between microeconomics and macroeconomics
Explain the difference between microeconomics and macroeconomicsMonzur Mishu
 
Macro vs Microeconomics
Macro vs MicroeconomicsMacro vs Microeconomics
Macro vs MicroeconomicseduCBA
 
Micro & macroeconomics
Micro  & macroeconomicsMicro  & macroeconomics
Micro & macroeconomicsVictoria Rock
 

Destacado (7)

2 introduction to microeconomics and macroeconomics
2 introduction to microeconomics and macroeconomics2 introduction to microeconomics and macroeconomics
2 introduction to microeconomics and macroeconomics
 
Ch. 1 micro and macro economics
Ch. 1 micro and macro economicsCh. 1 micro and macro economics
Ch. 1 micro and macro economics
 
Micro and Macro Economics
Micro and Macro EconomicsMicro and Macro Economics
Micro and Macro Economics
 
micro & macro economics
micro & macro economicsmicro & macro economics
micro & macro economics
 
Explain the difference between microeconomics and macroeconomics
Explain the difference between microeconomics and macroeconomicsExplain the difference between microeconomics and macroeconomics
Explain the difference between microeconomics and macroeconomics
 
Macro vs Microeconomics
Macro vs MicroeconomicsMacro vs Microeconomics
Macro vs Microeconomics
 
Micro & macroeconomics
Micro  & macroeconomicsMicro  & macroeconomics
Micro & macroeconomics
 

Similar a Difference between micro & Macro Economics

Unit 1 (Introduction to Macro Economics) by Dr. Abhay Singh Chauhan
Unit 1 (Introduction to Macro Economics) by Dr. Abhay Singh ChauhanUnit 1 (Introduction to Macro Economics) by Dr. Abhay Singh Chauhan
Unit 1 (Introduction to Macro Economics) by Dr. Abhay Singh ChauhanDr. Abhay Singh Chauhan
 
Macroeconomics - introduction.ppt
Macroeconomics - introduction.pptMacroeconomics - introduction.ppt
Macroeconomics - introduction.pptDranupama2
 
Macro economics i
Macro economics   iMacro economics   i
Macro economics iDhina Karan
 
Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...
Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...
Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...SOURAV DAS
 
Macroeconomics chapter 01
Macroeconomics chapter 01Macroeconomics chapter 01
Macroeconomics chapter 01SapanMiah
 
ch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).ppt
ch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).pptch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).ppt
ch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).pptSIRINET2
 
MACRO AND MICRO.ppt
MACRO AND MICRO.pptMACRO AND MICRO.ppt
MACRO AND MICRO.pptSIRINET2
 
ch-151121055720-lva1-app6892.pdf
ch-151121055720-lva1-app6892.pdfch-151121055720-lva1-app6892.pdf
ch-151121055720-lva1-app6892.pdfSIRINET2
 
Macro n micro eco 20-8-16
Macro n micro eco 20-8-16Macro n micro eco 20-8-16
Macro n micro eco 20-8-16Shweta Iyer
 
Microvsmacroeconomics 170824091508
Microvsmacroeconomics 170824091508Microvsmacroeconomics 170824091508
Microvsmacroeconomics 170824091508LESEGO LEBOGANG
 
1 Intro to Microeconomics and Macroeconomics
1 Intro to Microeconomics and Macroeconomics1 Intro to Microeconomics and Macroeconomics
1 Intro to Microeconomics and MacroeconomicsPriyanka Goswami
 
Classical Vs Keynesian Economics
Classical Vs Keynesian EconomicsClassical Vs Keynesian Economics
Classical Vs Keynesian EconomicsLiz Hernandez
 
Concept-of-macroeconomics
Concept-of-macroeconomicsConcept-of-macroeconomics
Concept-of-macroeconomicsOm Mallik
 

Similar a Difference between micro & Macro Economics (20)

Macro i ch_1
Macro i ch_1Macro i ch_1
Macro i ch_1
 
Unit 1 (Introduction to Macro Economics) by Dr. Abhay Singh Chauhan
Unit 1 (Introduction to Macro Economics) by Dr. Abhay Singh ChauhanUnit 1 (Introduction to Macro Economics) by Dr. Abhay Singh Chauhan
Unit 1 (Introduction to Macro Economics) by Dr. Abhay Singh Chauhan
 
Economics
EconomicsEconomics
Economics
 
Eec ucet rumeet
Eec ucet rumeetEec ucet rumeet
Eec ucet rumeet
 
Macroeconomics - introduction.ppt
Macroeconomics - introduction.pptMacroeconomics - introduction.ppt
Macroeconomics - introduction.ppt
 
Macro economics i
Macro economics   iMacro economics   i
Macro economics i
 
Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...
Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...
Macroeconomics basic notes WITH CONCEPTS INFLATION , NATIONAL INCOME , SAVING...
 
Macroeconomics chapter 01
Macroeconomics chapter 01Macroeconomics chapter 01
Macroeconomics chapter 01
 
Chap._1.ppt.pdf
Chap._1.ppt.pdfChap._1.ppt.pdf
Chap._1.ppt.pdf
 
ch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).ppt
ch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).pptch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).ppt
ch-151121055720-lva1-app6892 (DESKTOP-019L81I's conflicted copy 2023-03-15).ppt
 
MACRO AND MICRO.ppt
MACRO AND MICRO.pptMACRO AND MICRO.ppt
MACRO AND MICRO.ppt
 
ch-151121055720-lva1-app6892.pdf
ch-151121055720-lva1-app6892.pdfch-151121055720-lva1-app6892.pdf
ch-151121055720-lva1-app6892.pdf
 
MACRO VS MICRO ECONOMICS.pptx
MACRO VS MICRO ECONOMICS.pptxMACRO VS MICRO ECONOMICS.pptx
MACRO VS MICRO ECONOMICS.pptx
 
Macro economics
Macro economicsMacro economics
Macro economics
 
Macro n micro eco 20-8-16
Macro n micro eco 20-8-16Macro n micro eco 20-8-16
Macro n micro eco 20-8-16
 
Microvsmacroeconomics 170824091508
Microvsmacroeconomics 170824091508Microvsmacroeconomics 170824091508
Microvsmacroeconomics 170824091508
 
1 Intro to Microeconomics and Macroeconomics
1 Intro to Microeconomics and Macroeconomics1 Intro to Microeconomics and Macroeconomics
1 Intro to Microeconomics and Macroeconomics
 
Advanced macro economics
Advanced macro economicsAdvanced macro economics
Advanced macro economics
 
Classical Vs Keynesian Economics
Classical Vs Keynesian EconomicsClassical Vs Keynesian Economics
Classical Vs Keynesian Economics
 
Concept-of-macroeconomics
Concept-of-macroeconomicsConcept-of-macroeconomics
Concept-of-macroeconomics
 

Más de Abhishek Choksi

Industrial Instrumentation (2170913) (Variable Inductance & Capacitance Tran...
Industrial Instrumentation (2170913)  (Variable Inductance & Capacitance Tran...Industrial Instrumentation (2170913)  (Variable Inductance & Capacitance Tran...
Industrial Instrumentation (2170913) (Variable Inductance & Capacitance Tran...Abhishek Choksi
 
Switch Gear & Protection (2170908) (Generator Protection)
Switch Gear & Protection (2170908) (Generator Protection)Switch Gear & Protection (2170908) (Generator Protection)
Switch Gear & Protection (2170908) (Generator Protection)Abhishek Choksi
 
Design of Magnetic Circuit for Synchronous Machine
Design of Magnetic Circuit for Synchronous MachineDesign of Magnetic Circuit for Synchronous Machine
Design of Magnetic Circuit for Synchronous MachineAbhishek Choksi
 
Inter Connected Power System (2170901)
Inter Connected Power System (2170901)Inter Connected Power System (2170901)
Inter Connected Power System (2170901)Abhishek Choksi
 
Closed loop speed control
Closed loop speed controlClosed loop speed control
Closed loop speed controlAbhishek Choksi
 
Synthesis of unsymmetrical phasors from their symmetrical components
Synthesis of unsymmetrical phasors from their symmetrical componentsSynthesis of unsymmetrical phasors from their symmetrical components
Synthesis of unsymmetrical phasors from their symmetrical componentsAbhishek Choksi
 
Measurement of hvac (High Voltage Engineering )
Measurement  of  hvac (High Voltage Engineering )Measurement  of  hvac (High Voltage Engineering )
Measurement of hvac (High Voltage Engineering )Abhishek Choksi
 
Supply system (Electrical Power System)
Supply system (Electrical Power System)Supply system (Electrical Power System)
Supply system (Electrical Power System)Abhishek Choksi
 
Design of dc armature winding
Design of dc armature windingDesign of dc armature winding
Design of dc armature windingAbhishek Choksi
 
8051 microcontroller and it’s interface
8051 microcontroller and it’s interface8051 microcontroller and it’s interface
8051 microcontroller and it’s interfaceAbhishek Choksi
 
Principle of regenerative braking and chopper configuration
Principle of regenerative braking and chopper configurationPrinciple of regenerative braking and chopper configuration
Principle of regenerative braking and chopper configurationAbhishek Choksi
 
Web application attack and audit framework (w3af)
Web application attack and audit framework (w3af)Web application attack and audit framework (w3af)
Web application attack and audit framework (w3af)Abhishek Choksi
 
Discrete Fourier Transform
Discrete Fourier TransformDiscrete Fourier Transform
Discrete Fourier TransformAbhishek Choksi
 

Más de Abhishek Choksi (20)

Industrial Instrumentation (2170913) (Variable Inductance & Capacitance Tran...
Industrial Instrumentation (2170913)  (Variable Inductance & Capacitance Tran...Industrial Instrumentation (2170913)  (Variable Inductance & Capacitance Tran...
Industrial Instrumentation (2170913) (Variable Inductance & Capacitance Tran...
 
Switch Gear & Protection (2170908) (Generator Protection)
Switch Gear & Protection (2170908) (Generator Protection)Switch Gear & Protection (2170908) (Generator Protection)
Switch Gear & Protection (2170908) (Generator Protection)
 
Design of Magnetic Circuit for Synchronous Machine
Design of Magnetic Circuit for Synchronous MachineDesign of Magnetic Circuit for Synchronous Machine
Design of Magnetic Circuit for Synchronous Machine
 
Inter Connected Power System (2170901)
Inter Connected Power System (2170901)Inter Connected Power System (2170901)
Inter Connected Power System (2170901)
 
Third harmonic pwm
Third harmonic pwmThird harmonic pwm
Third harmonic pwm
 
Electric welding
Electric weldingElectric welding
Electric welding
 
Closed loop speed control
Closed loop speed controlClosed loop speed control
Closed loop speed control
 
Synthesis of unsymmetrical phasors from their symmetrical components
Synthesis of unsymmetrical phasors from their symmetrical componentsSynthesis of unsymmetrical phasors from their symmetrical components
Synthesis of unsymmetrical phasors from their symmetrical components
 
Design of lv winding
Design  of  lv  windingDesign  of  lv  winding
Design of lv winding
 
Measurement of hvac (High Voltage Engineering )
Measurement  of  hvac (High Voltage Engineering )Measurement  of  hvac (High Voltage Engineering )
Measurement of hvac (High Voltage Engineering )
 
Supply system (Electrical Power System)
Supply system (Electrical Power System)Supply system (Electrical Power System)
Supply system (Electrical Power System)
 
Design of dc armature winding
Design of dc armature windingDesign of dc armature winding
Design of dc armature winding
 
8051 microcontroller and it’s interface
8051 microcontroller and it’s interface8051 microcontroller and it’s interface
8051 microcontroller and it’s interface
 
Principle of regenerative braking and chopper configuration
Principle of regenerative braking and chopper configurationPrinciple of regenerative braking and chopper configuration
Principle of regenerative braking and chopper configuration
 
Root locus
Root locus Root locus
Root locus
 
Web application attack and audit framework (w3af)
Web application attack and audit framework (w3af)Web application attack and audit framework (w3af)
Web application attack and audit framework (w3af)
 
Discrete Fourier Transform
Discrete Fourier TransformDiscrete Fourier Transform
Discrete Fourier Transform
 
K - Map
  K - Map    K - Map
K - Map
 
Blue led
Blue ledBlue led
Blue led
 
Mars orbiter mission
Mars orbiter missionMars orbiter mission
Mars orbiter mission
 

Último

Gender Bias in Engineer, Honors 203 Project
Gender Bias in Engineer, Honors 203 ProjectGender Bias in Engineer, Honors 203 Project
Gender Bias in Engineer, Honors 203 Projectreemakb03
 
Engineering Mechanics Chapter 5 Equilibrium of a Rigid Body
Engineering Mechanics  Chapter 5  Equilibrium of a Rigid BodyEngineering Mechanics  Chapter 5  Equilibrium of a Rigid Body
Engineering Mechanics Chapter 5 Equilibrium of a Rigid BodyAhmadHajasad2
 
Multicomponent Spiral Wound Membrane Separation Model.pdf
Multicomponent Spiral Wound Membrane Separation Model.pdfMulticomponent Spiral Wound Membrane Separation Model.pdf
Multicomponent Spiral Wound Membrane Separation Model.pdfGiovanaGhasary1
 
Dev.bg DevOps March 2024 Monitoring & Logging
Dev.bg DevOps March 2024 Monitoring & LoggingDev.bg DevOps March 2024 Monitoring & Logging
Dev.bg DevOps March 2024 Monitoring & LoggingMarian Marinov
 
A Seminar on Electric Vehicle Software Simulation
A Seminar on Electric Vehicle Software SimulationA Seminar on Electric Vehicle Software Simulation
A Seminar on Electric Vehicle Software SimulationMohsinKhanA
 
cloud computing notes for anna university syllabus
cloud computing notes for anna university syllabuscloud computing notes for anna university syllabus
cloud computing notes for anna university syllabusViolet Violet
 
The relationship between iot and communication technology
The relationship between iot and communication technologyThe relationship between iot and communication technology
The relationship between iot and communication technologyabdulkadirmukarram03
 
Vertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptx
Vertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptxVertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptx
Vertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptxLMW Machine Tool Division
 
How to Write a Good Scientific Paper.pdf
How to Write a Good Scientific Paper.pdfHow to Write a Good Scientific Paper.pdf
How to Write a Good Scientific Paper.pdfRedhwan Qasem Shaddad
 
Phase noise transfer functions.pptx
Phase noise transfer      functions.pptxPhase noise transfer      functions.pptx
Phase noise transfer functions.pptxSaiGouthamSunkara
 
Basic Principle of Electrochemical Sensor
Basic Principle of  Electrochemical SensorBasic Principle of  Electrochemical Sensor
Basic Principle of Electrochemical SensorTanvir Moin
 
Power System electrical and electronics .pptx
Power System electrical and electronics .pptxPower System electrical and electronics .pptx
Power System electrical and electronics .pptxMUKULKUMAR210
 
Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...
Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...
Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...Amil baba
 
Guardians and Glitches: Navigating the Duality of Gen AI in AppSec
Guardians and Glitches: Navigating the Duality of Gen AI in AppSecGuardians and Glitches: Navigating the Duality of Gen AI in AppSec
Guardians and Glitches: Navigating the Duality of Gen AI in AppSecTrupti Shiralkar, CISSP
 
Graphics Primitives and CG Display Devices
Graphics Primitives and CG Display DevicesGraphics Primitives and CG Display Devices
Graphics Primitives and CG Display DevicesDIPIKA83
 
Technology Features of Apollo HDD Machine, Its Technical Specification with C...
Technology Features of Apollo HDD Machine, Its Technical Specification with C...Technology Features of Apollo HDD Machine, Its Technical Specification with C...
Technology Features of Apollo HDD Machine, Its Technical Specification with C...Apollo Techno Industries Pvt Ltd
 
sdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdf
sdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdfsdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdf
sdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdfJulia Kaye
 

Último (20)

Lecture 2 .pptx
Lecture 2                            .pptxLecture 2                            .pptx
Lecture 2 .pptx
 
Gender Bias in Engineer, Honors 203 Project
Gender Bias in Engineer, Honors 203 ProjectGender Bias in Engineer, Honors 203 Project
Gender Bias in Engineer, Honors 203 Project
 
Engineering Mechanics Chapter 5 Equilibrium of a Rigid Body
Engineering Mechanics  Chapter 5  Equilibrium of a Rigid BodyEngineering Mechanics  Chapter 5  Equilibrium of a Rigid Body
Engineering Mechanics Chapter 5 Equilibrium of a Rigid Body
 
Multicomponent Spiral Wound Membrane Separation Model.pdf
Multicomponent Spiral Wound Membrane Separation Model.pdfMulticomponent Spiral Wound Membrane Separation Model.pdf
Multicomponent Spiral Wound Membrane Separation Model.pdf
 
Dev.bg DevOps March 2024 Monitoring & Logging
Dev.bg DevOps March 2024 Monitoring & LoggingDev.bg DevOps March 2024 Monitoring & Logging
Dev.bg DevOps March 2024 Monitoring & Logging
 
A Seminar on Electric Vehicle Software Simulation
A Seminar on Electric Vehicle Software SimulationA Seminar on Electric Vehicle Software Simulation
A Seminar on Electric Vehicle Software Simulation
 
Présentation IIRB 2024 Marine Cordonnier.pdf
Présentation IIRB 2024 Marine Cordonnier.pdfPrésentation IIRB 2024 Marine Cordonnier.pdf
Présentation IIRB 2024 Marine Cordonnier.pdf
 
Présentation IIRB 2024 Chloe Dufrane.pdf
Présentation IIRB 2024 Chloe Dufrane.pdfPrésentation IIRB 2024 Chloe Dufrane.pdf
Présentation IIRB 2024 Chloe Dufrane.pdf
 
cloud computing notes for anna university syllabus
cloud computing notes for anna university syllabuscloud computing notes for anna university syllabus
cloud computing notes for anna university syllabus
 
The relationship between iot and communication technology
The relationship between iot and communication technologyThe relationship between iot and communication technology
The relationship between iot and communication technology
 
Vertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptx
Vertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptxVertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptx
Vertical- Machining - Center - VMC -LMW-Machine-Tool-Division.pptx
 
How to Write a Good Scientific Paper.pdf
How to Write a Good Scientific Paper.pdfHow to Write a Good Scientific Paper.pdf
How to Write a Good Scientific Paper.pdf
 
Phase noise transfer functions.pptx
Phase noise transfer      functions.pptxPhase noise transfer      functions.pptx
Phase noise transfer functions.pptx
 
Basic Principle of Electrochemical Sensor
Basic Principle of  Electrochemical SensorBasic Principle of  Electrochemical Sensor
Basic Principle of Electrochemical Sensor
 
Power System electrical and electronics .pptx
Power System electrical and electronics .pptxPower System electrical and electronics .pptx
Power System electrical and electronics .pptx
 
Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...
Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...
Best-NO1 Best Rohani Amil In Lahore Kala Ilam In Lahore Kala Jadu Amil In Lah...
 
Guardians and Glitches: Navigating the Duality of Gen AI in AppSec
Guardians and Glitches: Navigating the Duality of Gen AI in AppSecGuardians and Glitches: Navigating the Duality of Gen AI in AppSec
Guardians and Glitches: Navigating the Duality of Gen AI in AppSec
 
Graphics Primitives and CG Display Devices
Graphics Primitives and CG Display DevicesGraphics Primitives and CG Display Devices
Graphics Primitives and CG Display Devices
 
Technology Features of Apollo HDD Machine, Its Technical Specification with C...
Technology Features of Apollo HDD Machine, Its Technical Specification with C...Technology Features of Apollo HDD Machine, Its Technical Specification with C...
Technology Features of Apollo HDD Machine, Its Technical Specification with C...
 
sdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdf
sdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdfsdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdf
sdfsadopkjpiosufoiasdoifjasldkjfl a asldkjflaskdjflkjsdsdf
 

Difference between micro & Macro Economics

  • 1. Gandhinagar institute of technology  Sub – Engineering Economics & Management  Topic – Difference between micro & Macro Economics  Guided by – Prof. Prashant Pandya  Sem – 3rd  Branch – Electrical (b3)  Academic year – 2015&2016
  • 2. Prepared by  Shah Raj .S. (140120109054)  Abhishek Chokshi(140120109005)  Himal Desai (140120109008)
  • 3. Difference Between Micro & Macro Economics
  • 4. Index  Introduction  Concerned  Differences between micro & macro  Similarities between micro & macro
  • 5. Introduction  Microeconomics is the study of particular markets, and segments of the economy. It looks at issues such as consumer behaviour, individual labour markets, and the theory of firms.  Macro economics is the study of the whole economy. It looks at ‘aggregate’ variables, such as aggregate demand, national output and inflation.   
  • 6. Concerned -Microeconomics  Micro economics is concerned with:  Supply and demand in individual markets  Individual consumer behaviour. e.g. Consumer choice theory  Individual labour markets – e.g. demand for labour, wage determination  Externalities arising from production and consumption.
  • 7. Concerned- Macroeconomics  Macro economics is concerned with  Monetary / fiscal policy. e.g. what effect does interest rates have on whole economy?  Reasons for inflation, and unemployment  Economic Growth  International trade and globalisation  Reasons for differences in living standards and economic growth between countries.  Government borrowing
  • 8. Moving from Micro to Macro  If we look at a simple supply and demand diagram for motor cars. Microeconomics is concerned with issues such as the impact of an increase in demand for cars.  This micro economic analysis shows that the increased demand leads to higher price, and higher quantity.
  • 10. Macro economic analysis  This looks at all goods and services produced in the economy.  The macro diagram is looking at Real GDP (which is the total amount of output produced in the economy) instead of quantity.  Instead of the price of a good, we are looking at the overall price level (PL) for the economy. Inflation measures the annual % change in the aggregate price level.  Macro diagrams are based on the same principles as micro diagrams, we just look at Real GDP rather than Quantity and Inflation rather than Price Level (PL)
  • 12.  We can also consider differences between micro and macro economics. I will summarise the main differences here:  Small segment of economy vs whole aggregate economy.  Microeconomics works on principle that markets soon create equilibrium. In macro economics, the economy may be in a state of disequilibrium (boom or recession) for a longer period
  • 13.  There is little debate about the basic principles of micro- economics. Macro economics is more contentious. There are different schools of macro economics offering different explanations (e.g. Keynesian, Monetarist, Austrian, Real Business cycle e.t.c).  Macro economics places greater emphasis on empirical data and trying to explain it. Micro economics tends to work from theory
  • 14. Differences Between Microeconomic andMacroeconomics  The maindifference is that micro looks at small segments, and macro looks at the whole economy. But, there are other differences.  Equilibrium – Disequilibrium  Classical economic analysis assumes that markets return to equilibrium (S=D). If demand increases faster than supply, this causes price to rise and firms respond by increasing supply. For a long time, it was assumed that the macro economy behaved in the same way as micro economic analysis. Before, the 1930s, there wasn’t really a separate branch of economics called macroeconomics
  • 15.  Great Depression and Birth of Macroeconomics  In the 1930s, economies were clearly not in equilibrium. There was high unemployment, output was below capacity, and there was a state of disequilbrium Classical economics didn’t really have an explanation for this dis-equilibrium, which from a micro perspective, shouldn’t occur.  In 1936, J.M.Keynes produced his The General Theory of Employment, Interest and Money, this examined why the depression was lasting so long. It examined why we can be in a state of disequilibrium in the macro economy`
  • 16.  Keynes observed that we can have a negative output gap (disequilibrium in the macroeconomy) for a prolonged time. In other words, microeconomic principles of markets clearing, didn’t necessarily apply to macro economics. Keynes wasn’t the only economist to investigate this new branch of economics.  For example, Iriving Fisher examined the role of debt deflation in explaining the great depression. But, Keynes’ theory was the most wide ranging explanation, and played a large role in creating the new branch of macro-economics.
  • 17.  Since 1936, macroeconomics developed as a separate strand within economics. There have been competing explanations for issues such as inflation, recessions and economic growth.
  • 18. Similarities between Microeconomics and Macroeconomics  Although it is convenient to split up economics into two branches – microeconomics and macroeconomics, it is to some extent an artificial divide.  Micro principles used in macro economics. If you study impact of devaluation, you are likely to use same economic principles, such as the elasticity of demand to changes in price.
  • 19.  Micro effects macro economics and vice versa. If we see a rise in oil prices, this will have a significant impact on cost-push inflation. If technology reduces costs, this enables faster economic growth.  Blurring of distinction. If house prices rise, this is a micro economic effect for housing market. But, housing market is so influential that it could also be considered a macro-economic variable, and will influence monetary policy.  There have been efforts to use computer models of household behaviour to predict impact on macro economy.