In: Economics
Determine whether each of the following topics would more likely to be studied in microeconomics or macroeconomics.
Microeconomics |
Macroeconomics |
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How a change in interest rates by the Federal Reserve impacts unemployment | |||
The government's decision on how much to spend on public projects | |||
The effect of government regulation on a business firm’s costs and prices |
Topic 1 - Macroeconomics
Change in interest rate is the part of monetary policy that affects
investment & then employment. Therefore, it should be studied
in macroeconomics.
Topic 2 - Macroeconomics
Government spending is the part of fiscal policy that affects
aggregate demands. Hence, it should be studied in
macroeconomics.
Topic 3 - Microeconomics
Firm’s cost structure and related changes are firm specific issues.
So, it should be studied in microeconomics.