Question

________ are two principal branches of Economics.

• A. Micro Economics
• B. Macro Economics
• C. Modern Economics
• D. Both (a) and (b)

Hint:

Micro = Microscope (looking at individual cells).
Macro = Satellite (looking at the whole earth).

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
The study of economics is categorized based on the scale of analysis—whether we look at individual components or the entire system.
Step 2: Detailed Explanation:
1. Microeconomics focuses on the behavior of individual economic agents such as consumers, households, and firms. It deals with price determination in specific markets.
2. Macroeconomics focuses on the performance, structure, and behavior of the economy as a whole. It deals with aggregates like GDP, inflation, and national unemployment.
These two branches were formally distinguished by Ragnar Frisch in 1933 and form the foundation of economic study.
Step 3: Final Answer:
The two fundamental pillars of economic theory are Micro Economics and Macro Economics.