welcome to today's video. Today, we will talk about the subject matter of Economics. The subject matter of Economics is presently divided into two major branches: microeconomics and macroeconomics. These two terms have now become of General use in economics. Microeconomics: Microeconomics is the branch of Economics that studies the behavior and decision-making of individual economic units, such as firms and consumers. It is concerned with how these individual units interact with each other in markets to allocate scarce resources and determine prices and quantities of goods and services. Microeconomics focuses on understanding the behavior of individual consumers and firms in the market and how they respond to changes in economic conditions, such as changes in prices, income, and consumer preferences. This information is used to explain the behavior of prices and quantities of goods and services in the market and to analyze the impact of government policies, such as taxes and subsidies, on Market outcomes. Some key features of microeconomics are: Microeconomics studies the economic behavior of individual economic units, the study of economic behavior of

households, firms, and industries form the subject matter of microeconomics. It examines whether resources are efficiently allocated and spells out the conditions for the optimal allocation of resources so as to maximize output and social welfare. For example, microeconomics is concerned with how the individual consumer distributes his income among various products and services to maximize utility. Thus, microeconomics is concerned with the theories of product pricing, factor pricing, and economic welfare. 

Macroeconomics, on the other hand, is the study of the economy as a whole rather than the individual parts that make it up. It deals with aggregate measures such as total output, which is also known as gross domestic product, total employment, and the overall price level. Macroeconomics examines issues such as economic growth, inflation, and recession, and how changes in government policy, such as monetary and fiscal policy, can impact the economy. Some key features of macroeconomics are macroeconomics deals with the functioning of the economy as a whole. For example, macroeconomics seeks to explain how the economy's total output of goods and services and total

employment of resources are determined and what explains the fluctuation in the level of output and employment. It deals with broad economic issues such as full employment or unemployment, capacity or under capacity production, a low or high rate of growth, inflation or deflation. It is the theory of national income, employment, aggregate consumption, savings, and investment, general price level, and economic growth. Now let's talk about the interdependence between microeconomics and macroeconomics. Microeconomic analysis and macroeconomic analysis are complementary to each other. They do not complement but supplement each other. The basic goal of both the theories is the same: the maximization of the material welfare of the nation. From the microeconomic point of view, the nation's material welfare will be maximized by achieving optimal allocation of resources. From the macroeconomic point of view, the nation's material welfare will be maximized by achieving full utilization of productive resources of the economy. The study of both is equally vital so as to have full knowledge of the subject matter of economics. The contemporary economists are concerned with both microeconomics and macroeconomics.

hope now you understand micro and macroeconomics. In my next video, I'll discuss the central problem of economies.

Microeconomics vs. Macroeconomics - Concept, Difference, Micro & Macro Economic Interdependence.

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