00:01
Looking at the relationship between micro, make your pardon, and macroeconomics.
00:14
In fact, as the question suggests, it actually would want us to look at how microeconomics relates with macroeconomics.
00:25
Okay, so first of all, by definition, you notice that microeconomics actually focuses on individual entities.
00:34
So microeconomics does focus on individual entities in the economy.
00:42
And we can mention these to be households and businesses.
00:51
And we also look at the government and it's the foreign sector, if it's an open economy.
01:01
So these individual entities in their individual decision -making would be within the microeconomic analysis.
01:16
But when we're dealing with the macro component, it's actually how those entities are interlinked.
01:25
And so we basically look at the economy as a whole in macroeconomic analysis.
01:31
The economy as a whole.
01:35
So in order to basically just look at the fundamental relationship, you might need to borrow the concept of analysis of market forces.
01:50
So we normally look at demand and supply in individual entities decision making, consummating with the interaction of supply and demand to give, for instance, the equilibrium price level.
02:10
So that's how the price is determined in a market, in a particular market.
02:14
But when we're dealing with, okay, so this is at micro level, when you're dealing with microeconomic analysis, so we basically look now at the aggregate, so we look at the aggregate supply and aggregate demand...