Small segment of economy vs whole aggregate economy.The main differences between micro and macro economics Macro diagrams are based on the same principles as micro diagrams we just look at Real GDP rather than quantity and Inflation rather than Price Level (PL).Instead of just looking at individual demand for cars, we are looking at aggregate demand (AD) – total demand in the economy.Inflation measures the annual % change in the aggregate price level. Instead of the price of a good, we are looking at the overall price level (PL) for the economy.
The macro diagram is looking at real GDP (which is the total amount of output produced in the economy) instead of quantity.This looks at all goods and services produced in the economy. This micro economic analysis shows that the increased demand leads to higher price and higher quantity. Microeconomics is concerned with issues such as the impact of an increase in demand for cars. If we look at a simple supply and demand diagram for motor cars. Reasons for differences in living standards and economic growth between countries.Reasons for inflation and unemployment.what effect does interest rates have on the whole economy?
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