Dependence of Macroeconomic on Microeconomics

Macroeconomics  is the study of activity related to  aggregate such as national income, total output, general price level, etc. But this macroeconomics variables are the total sum of microeconomics variables therefore Macroeconomics is dependent upon Microeconomics the dependence of Macroeconomic on Microeconomics.

Microeconomicss the study of individual part of the economy where macroeconomic is the study of economy as a whole but it is quite wrong to think that these two approaches are separate different and unconnected to each other approach is complete without the other through economist might emphasize one or the other of the analysis according to their convincence the two approaches are not competitive but complementary to each other.

strictly speaking there is only one 'economics'. The Macroeconomic theory has a foundation in Microeconomic theory and Microeconomic theory has  foundation is Macroeconomic theory-

                                   Edward Shapiro 

 

From the above opinion of Edward Shapiro. It is clear that micro and macro economics are interdependent with each other and one cannot exist is absence of another. The interdependence of micro and macroeconomic can be explained by the help of the following headings:-

Dependence of Macroeconomic on Microeconomics

Macroeconomics  is the study of activity related to  aggregate such as national income, total output, general price level, etc. But this macroeconomics variables are the total sum of microeconomics variables therefore Macroeconomics is dependent upon Microeconomics the dependence of Macroeconomic on Microeconomics can be explained as follows:- 

(1):-Determination of national income-

National income is the subject matter of macroeconomics  but national income is calculated by the total sum of individual income. The study of individual income is the subject matter of microeconomic. Thus, Macroeconomics dependent upon Microeconomics 

(2):-Determination of price level-

The determination of price level is a subject matter of macroeconomics but it is the average of all prices of individual goods and services. Thus macroeconomic  is dependent upon microeconomics.

(3):-Determination of employment level-

The determination of employment level is for the studied under macroeconomics but to find out the level of employment in economy, The employment provided by each and every firm has to study of microeconomics necessary for the determination of employment.

(4):- Determination of investment-

Investment theory is the subject matter of macroeconomics but the investment is determined by the rate of interest expected rate of profit. The rate of interest and profit are studied under microeconomics. Thus, Macroeconomics is dependent upon Microeconomics.

(5):- Study of total saving income-

The total saving of any economy depends upon the saving of different sector, i.e, total saving is the sum of personal saving, business saving, and government saving, The saving in different sector of the economy is studied under the Microeconomics. Thus, Macroeconomics is dependent upon microeconomics.