Macroeconomics is the study of the economy as a whole, as distinguished from microeconomics, which is the study of individual consumers, workers, firms, industries, and markets. Microeconomics focuses on the individual economic decision maker (or “agent”) without attempting to take into account the full range of interactions that take place between one decision maker and another. Thus, for example, a microeconomic study of an excise tax on the purchase of cigarettes would consider the effect of that tax on the sales of cigarettes but not attempt to account for the effects of that tax on the sales of watermelons and then its feedback effects on the demand for cigarettes.

Macroeconomics, on the other hand, is a study of feedback ...

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