The study of economics emcompasses such a wide variety of different but interconnected fields and industries that it is necessary to divide it into smaller subjects under the umbrella of economics as a field of study. The same as mathematics includes a variety of more specific subjects such as calculus and geometry, economics contains several categories within it that merit their own classification as a specific subject to be studied. The two most well known and studied of these specific subjects are the study of Microeconomics and the study of Macroeconomics.
The difference between microeconomics and macroeconomics is fairly simple, and can be found in the prefixes of the words themselves. Micro comes from the greek word mikros, meaning “small”, while Macro comes from the greek word makros, meaning large. So as should seem obvious to most, microeconomics is a term that refers to the study of economics on a small scale while macroeconomics refers to the study of economics on a large scale. So under the umbrella of microeconomics falls the study and analysis of things such as supply and demand for a single product, or personal budgeting. Any aspect of economic study that is focused on a specific individual, product, or company will be considered microeconomic in nature. On the other hand, macroeconomics is less specific and broader in its scope. Macroeconomics involves the study of the economy as a whole.
The ‘economy as a whole’ is perhaps too vague as a description of the field of macroeconomics. The study of things like unemployment rates, levels of a nation’s imports and exports, and tariffs on trade are all areas of study that would be considered macroeconomics. For the most part, when watching the news, most of the economic stories being reported on and talked about by politicians are macroeconomic issues. They impact each and every person in the country. Any large scale economic activity is considered to be macroeconomics.
While it is useful to distinguish between microeconomics and macroeconomics for the most part, they are interrelated subjects. It is impossible to delineate completely between the two fields, as each of them has effects on the other to a large degree. Macroeconomic issues that impact the entire country like inflation rates will without a doubt have an effect on microeconomic issues like a small business losing profits. And the reverse is true as well. Microeconomic issues like the reduction in supply for one product can have a significant impact on macroeconomic issues like total gross domestic product.