The study of Economics is divided into two parts: Microeconomics and Macroeconomics. In this article, we’ll study these two dimensions of Economics.
Microeconomics:

• ‘Micro’ is a Greek word that means ‘small’. It is used to describe the small picture of Economics.
• Microeconomics studies how supply and demand interact in individual markets for goods and services.
• It is basically based on the models of consumers and firms that make decisions about what to produce, sell, or buy.
• It includes the study of individual choices and markets ( perfect, monopoly, oligopoly, etc.).
• Microeconomics includes key definitions like consumer behaviour, price determination, supply, demand, equilibrium, production theory, cost of production, consumption and more.
• While Adam Smith is widely regarded as the father of Economics, Alfred Marshall is regarded as the father of modern microeconomics.
  Macroeconomics:

• ‘Macro’ is a Greek word that means ‘big’ and so it describes the big picture of Economics.
• Macroeconomics is the study of Economics at the national level, and that’s why it is also known as ‘ Aggregate Economics ‘.
• It includes the overall study of Economics and how certain factors within the region affect the economy.
• Macroeconomics is particularly influenced by the work of John Maynard Keynes.
• It deals with theories of income and employment.
• The macroeconomics study terms like National income, GDP, Inflation, unemployment rate, monetary policy, fiscal policy, GNP, economic growth and more.
  History:
  The division of Economics into two different types is largely attributed to economist John Maynard Keynes, who wrote about it in his book “The General Theory of Employment, Interest, and Money.” In this book, Keynes emphasized the importance of macroeconomics and its Impact on the country as a whole, which laid the groundwork for macroeconomics theory.
  This distinction became more formalized in the mid-20th century as the field of Economics evolved.

Role of the great depression 1930:
The great depression was the period that pushed economists to acknowledge that understanding individual markets wasn’t enough. This crisis laid the foundation for the distinction between microeconomics and Macroeconomics. Further, there was a rise in tools and policies that are still in use.

Before the great depression, Economics was largely classical in nature. Microeconomics became the focus because it was not considered enough for an economy. Moreover, it was assumed that markets were self-correcting and always tended towards full employment.

Differences between microeconomics and Macroeconomics:

1. Scope of Study

• Microeconomics focuses on the individual parts of the economy. It studies how households and firms make decisions, how they interact in specific markets, and how prices and quantities are determined.
• Macroeconomics, on the other hand, looks at the economy as a whole. It studies aggregated indicators such as national income, overall price levels, total employment, and economic growth. This is a top-down approach—understanding large-scale economic activity and the policies that influence it.

1. Units of Analysis

• In microeconomics, the unit of analysis is the individual: a consumer deciding what to buy, a firm deciding how much to produce, or a worker deciding how much labor to supply. It’s concerned with optimizing behavior in response to incentives and constraints.
• In macroeconomics, the units are aggregates: total consumer spending, national output (GDP), average price levels, total employment/unemployment, etc. It deals with economy-wide phenomena rather than specific choices by single actors.

1. Role of Government and Policy

• Microeconomics considers government intervention in terms of regulations, taxes, and subsidies affecting specific markets (like imposing a tax on sugary drinks to reduce consumption).
• Macroeconomics deals with broader policy tools: fiscal policy (government spending and taxation) and monetary policy (control of the money supply and interest rates).