What is meant by aggregation? Why is aggregation important for macroeconomic analysis?
What will be an ideal response?
Aggregation refers to the process of adding together individual economic variables to obtain economywide totals. Aggregation distinguishes microeconomics from macroeconomics. It allows us to study the economy as a whole, rather than looking at its individual parts.
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In the Solow model, if f(k) = 6k0.5, s = 0.1, n = 0.1, and d = 0.2, what is the value of c at equilibrium?
A) 10 B) 10.4 C) 10.8 D) 11.2
Scarcity would cease to exist as an economic problem if: a. we learned to cooperate and not compete with each other
b. there were new discoveries of an abundance of natural resources. c. output per worker increased. d. none of the above.
Firms in perfect competition sell differentiated products
a. True b. False Indicate whether the statement is true or false
Large productivity gains explain:
A. the long-term increase in real wages B. skill-based technological change. C. increasing wage inequality D. high unemployment in Western Europe.