+SPECTRUM STUDY CIRCLE

(The Acme of Excellence)1 5/22 IInd Floor Ashok Nagar, New Delhi-110018.

Ph.: 25499279, 55711031(O), 9810378235(M)

1. What is meant by micro economics ?Ans:- Micro Economics:- The term micro is derived from the Greek word micros which means small. It deals with the behaviour of individual economic units. It Concern itself with the detailed study of individual decision makers like a household, a firm. How a consumer maximizes his satisfaction with his satisfaction with his limited income or how a firm maximizes its profits.2. What is meant by Marco Economics ?Ans:- Macro Economics:- The word ‘Macro’ is taken from Greek word ‘Macros’ which means large. Macro economics is the study of aggregates or averages covering the entire economy. It is concerned with the study of national income and not individual income, national saving and not production of individual price etc.3. Differentiate between micro economics and macro economics.Ans:- Following are the main differences between micro and macro economics-Micro Economics Macro Economics

1. It is study of individual economic units.

2. It deals with individual income, individual prices.

3. Its central problem is price determination.

4. Its main tools are demand and supply.

It is study of economy as a whole.

It deals with National income, General price level, and national output etc.Its central problem is income and employment determination.Its main tools are aggregate demand and aggregate supply.

4. Briefly explain the importance of macro economics.Or

Why a separate theory of Macro Economics needed? Ans:- Importance of Macro Economics

1. Suitable for the study of the economy :- Experience tells us whatever is true for an individual unit may not necessarily be true for the whole economy. For example, a depositor can withdraw money from the bank whenever he likes but it all depositors together withdraw their money, the bank will fail. Therefore, we have to study macro economics so that we can draw right conclusions by studying the working of the whole economy.

2. Helpful in the study of economic problem and policy formulations :- Every economy has to face a number of problems concerting the entire economy, such as how to control price fluctuations, how to overcome the problem of unemployment and how to plan for the rapid development of the economy and so on. It is only through macro- economic approach that we can study such aggregative problems and can attempt for their solutions.

+SPECTRUM STUDY CIRCLE

(The Acme of Excellence)1 5/22 IInd Floor Ashok Nagar, New Delhi-110018.

Ph.: 25499279, 55711031(O), 9810378235(M)

5. How are micro economics and macro economics complementary to each other ?Or

Explain with example interdependence between micro and macro economics. Ans:- Although micro economics and macro economics are two approaches to the study of economic phenomena yet they are interdependent and complementary to each other. For instance on economy comprises all the producing units located within a given geographical area. Thus total output of an economy is nothing but sum total of outputs of individual producing units indicating dependence of macro analysis upon micro analysis.

6. What is the alternative name of micro – economics?Ans: Price Theory7. What is the alternative name of macro economics ?Ans:- Theory of income and Employment.8. Name the Keynes most notable book and also tell its year of publication.Ans:- “General Theory of Employment, Interest and Money”. ’1936’