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Question
Discuss the subject matter of economics.
Discuss the subject matter of economics.
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Solution
Microeconomics studies the behaviour of the elements of the economy such as consumers and producers and explains, through their interaction, how resources are allocated among competing uses. It also explains how the prices of goods and services of factors are determined. It is also called price theory.
Macroeconomics studies the economy as a whole and explains how aggregates of the entire economy such as national income, aggregate demand, level of employment, general price level are determined. It is also called income and employment theory.
Microeconomics studies the behaviour of the elements of the economy such as consumers and producers and explains, through their interaction, how resources are allocated among competing uses. It also explains how the prices of goods and services of factors are determined. It is also called price theory.
Macroeconomics studies the economy as a whole and explains how aggregates of the entire economy such as national income, aggregate demand, level of employment, general price level are determined. It is also called income and employment theory.
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