Explain the difference between macroeconomics and microeconomics. Give examples of each.
What will be an ideal response?
Macroeconomics focuses on aggregate economic behavior. Full employment, price stability, and economic growth are macroeconomic issues. Microeconomics is concerned with the smaller components that actually contribute to the macroeconomy, such as individuals, particular business firms and industries, and government agencies.
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Everything else remaining unchanged, a sudden increase in the price of oil is likely to cause a(n):
A) downward movement along the demand curve for labor. B) leftward shift in the demand curve for labor. C) upward movement along the demand curve for labor. D) rightward shift in the demand curve for labor
Which of the following are TRUE regarding "positive" statements? I. They describe what "ought to be." II. They describe what is believed about how the world appears. III. They can be tested as to their accuracy
A) I and II B) II and III C) I and III D) I, II and III
Most taxes distort incentives and move the allocation of resources away from the social optimum. Why do corrective taxes avoid the disadvantages of most other taxes?
a. Corrective taxes apply only to goods that are bad for people's health, such as cigarettes and alcohol. b. Because corrective taxes correct for market externalities, they take into consideration the well-being of bystanders. c. Corrective taxes provide incentives for the conservation of natural resources. d. Corrective taxes do not affect deadweight loss.
Which of the following is NOT true of the European Union
A. The EU promoted freer trade between member countries B. The EU allows members to benefit from economies of scale in selling to a larger market C. The EU provides a common currency for a subset of its members D. The EU was established in 1999