Distinguish between micro economics and macro economics?

Answer 1

Microeconomics deals with the relationship between financial and goods matters on a personal level, which can extend to the accounting systems of separate firms or banks. There is no relationship with anything more than in one sector of the macroecomonic system (see below), and within this sector it is only the relationship between its various parts such as labour and wages, or capital investment and dividends that can be covered by this subject. It becomes interesting when for example the legal aspects of how to divide inheritances between distant members of families is examined in detail.

Macroeconomics deals with the "big-picture" of the whole system. This involves the functional way that various parts of the system are connected, by their being represented as various sectors within the community. These sectors include at least the following: landlords, government, house-holders, producers, capitalists and banks (and other finance institutions). To achieve this capacity to cover the complete activities within a country, macroeconomics must incorporate a model of the system and within the model it must contain the various sectors (or functional entities) by which the nation works as a compound community, various activities within the system being autonomously controlled. The problems that characterise this are equilibrium and stability (also instability as at present) of the existing system and also of its growth and how this is both limited and encouraged by different forces working between the entities.