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Microeconomics is a subfield of traditional economics that examines how people and businesses behave when deciding how to distribute scarce resources and how these people and businesses interact. Unlike macroeconomics, which studies the entire national economy, microeconomics focuses on the analysis of specific markets, sectors, or industries. Analysis of the market processes that determine relative prices for different goods and services and distribute scarce resources among potential users is one of the objectives of microeconomics. Microeconomics demonstrates the circumstances under which free markets result in optimal distributions. It also examines market failure, which occurs when markets are unable to generate effective outcomes.
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Macroeconomics is the study of an economy's overall performance, structure, behavior, and decision-making. The term comes from the Greek prefix makro-, which means "big," and economics. Using interest rates, taxes, and government expenditure, for instance, to control the expansion and stability of an economy. This covers local, national, and international economies. The Gross Domestic Product (GDP), unemployment (including unemployment rates), national income, price indices, output, consumption, inflation, saving, investment, energy, international commerce, and international finance are among the subjects that macroeconomists research.
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