Question

Distinhbish between Micro Variables and Macro Variables.

Answer 1

Micro Variables	Macro Variables
(a) Micro variables refer to individual demand, market demand, individual supply, price of a commodity, etc.	(a) Macro variables refer to inflation rate, aggregate demand, aggregate supply, employment.
(b) Micro variables are mostly independent. It does not affect the whole economy, as they are based on assumptions.	(b) Macro Variables are inter related and inter dependent. It affects the working of the economy as a whole.
(c) E.g., Price and Quantity demanded are universally related. This will hold true only if the income of the consumer, taste, fashion, etc., remain constant.	(c) Change in aggregate demand, aggregate supply will affect income, employment, etc. in the economy.