Dear learner,

Economics is a vast and constantly evolving field, with new branches emerging over time to study different aspects of economic behaviour and systems, such as development economics, environmental economics, and behavioural economics. However, the foundation of modern economics rests on its two major branches: microeconomics and macroeconomics. Microeconomics focuses on understanding the economic decisions and interactions of individual units, such as households, firms, and industries, examining how these decision-makers allocate scarce resources to meet their needs and wants. In contrast, macroeconomics takes a broader view, looking at the overall performance and behaviour of the economy as a whole, studying factors like GDP, unemployment rates, inflation, and the effects of government policies on the economy. While microeconomics is concerned with how individuals and firms allocate scarce resources to meet their needs and wants, macroeconomics is focused on how the collective decisions and behaviours of all economic agents (households, firms, government) affect the overall performance and stability of the economy. By understanding the differences between these two major branches, one can navigate the diverse and dynamic field of economics more effectively, equipped with the knowledge to apply both the microeconomic and macroeconomic perspectives to address a wide range of economic challenges.