With the introduction of micro and macro economics to the economics syllabus, students have become more aware of the concepts they will need to be successful in the subject. Whilst these two approaches differ greatly in their scope, micro and macro are both considered essential courses for all those studying economics.
Micro economic theories focus on how individuals within a society can influence the overall economic system. As such, a macroeconomic approach has its focus on how economies as a whole affect the overall state of the economy, or how economies affect the state of the world as a whole. In both cases, the aim is the same – to understand the economic process in a clear and concise manner. Micro economic theories deal with the way in which individuals within an economy affect how that economy functions and what impact that economy has on the wider world. In short, micro focuses on the individual and macro focuses on the economy in general.
Micro economic theories offer a much broader spectrum of influences on the market and include everything from the amount of money in circulation to the number of people living within a country's borders. The theory of demand and supply, for example, is covered in depth in this area of the syllabus.
Macroeconomic theories, on the other hand, deal with everything that impacts how the economy grows and changes over time. As such, they provide a much broader understanding of the economy's overall shape. These include the factors that influence the market, such as interest rates and monetary policies, and the factors that affect the state of the world, such as climate change and political unrest.
As well as being more in depth and detailed, macroeconomic theory also offers a much more definitive explanation as to why certain things occur in the economy. This helps students better understand why the market reacts in a certain way, and why certain aspects of the economy tend to grow faster than others. It is a useful tool to use when studying the economics syllabus because it helps students gain a deeper understanding of how the economy works and how the economic policy of the government affects it.
Although both micro and macro have their own benefits, they still work on different approaches to the economy. Microeconomics addresses the overall state of the economy whilst macroeconomics looks at how the economy affects the world. Students must always be aware of the differences between these two approaches and choose a method they feel more comfortable using when taking up their studies in Economics class 11.