LIMITATIONS OF MICROECONOMICS
LIMITATIONS OF MICROECONOMICS
TO REGARD THE AGGREGATES AS HOMOGENEOUS:
The main defect in macro analysis is that it regards the aggregates as homogeneous without caring about their internal compositions and structures,the averages wage in a country is the sum total of wages in all occupations,ex. wage of clerks,typists,teachers,nurses,etc. but the volume of aggregate employments depends on the relative structures of wages rather than on the everage wage ,if for instance,wages of nurses increases but of typists fall,the averages may remain unchanged ,but if the employments of nurses fallss a little and of typists rises much ,aggregate employments would increases.
TO REGARD THE AGGREGATES AS HOMOGENEOUS:
The main defect in macro analysis is that it regards the aggregates as homogeneous without caring about their internal compositions and structures,the averages wage in a country is the sum total of wages in all occupations,ex. wage of clerks,typists,teachers,nurses,etc. but the volume of aggregate employments depends on the relative structures of wages rather than on the everage wage ,if for instance,wages of nurses increases but of typists fall,the averages may remain unchanged ,but if the employments of nurses fallss a little and of typists rises much ,aggregate employments would increases.
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