Karnataka 2nd PUC Economics Notes Chapter 7 Introduction to Macro Economics
Difference between Micro and Macro Economics:
- Micro Economics studies in individual units so its scope is narrow.
- Macro Economics studies in aggregates, so its scope is wider.
Method of study:
- Micro Economics follows slicing method as it studies individual units.
- Macro Economics follows lumping method as it studies in aggregates.
The scope of Macro economics means the study of areas under Macro-economics.
1. It includes Major Sectors: The economy has many interdependent sectors like Household sector, Producer sector, Public sector, External sector. Each sector plays a significant role in an economy.
2. Study of National Income: In Macro economics, we study National Income and the concepts of National Income. Here we study GDP, GNP, NNP, NDP, Personal Income etc.
3. General Theory of Employment: The theory of employment includes the determinants of employment and unemployment. It studies the factors like aggregate demand, aggregate supply, aggregate consumption, aggregate savings etc.
4. Theory of general price: Inflation and deflation are the important ingredients of Macro economics. It provides information about rise and fall in general price levels.