is different from the model of supply and demand for a particular market, in tha

Question

       is different from the model of supply and demand for a particular market, in that we cannot focus on the substitution of resources between markets to explain aggregate relationships.
       is different from the model of supply and demand for a particular market, in that we have to separate real and nominal variables in the aggregate model.
       is a straightforward extension of the model of supply and demand for a particular market, in which substitution of resources between markets is highlighted.
       is a straightforward extension of the model of supply and demand for a particular market, in which the interaction between real and nominal variables is highlighted.

Explanation / Answer

Difference between macroeconomics and microeconomics lies in the fact that the former studies the relationship between variables affecting the whole economy while the latter deals with individual units. But the aggregate demand and supply can never be arrived at by summing the individual demand and supply since one cannot implement or initiate the substitution of resources between markets to explain aggregate relationships.

Hence option A is correct.

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