Question

I. Explain in your own words any three Macroeconomic variables from the "Great Depression". 

II. Explain your answer for the following statements whether they are Macroeconomics or Microeconomics and why?

I. "The Price of Camel" Explain your answer for the following statements whether they are Macroeconomics or Microeconomics and why?

II. "The Growth and development of Oman Economy" Explain your answer for the following statements whether they are Macroeconomics or Microeconomics and why? 

III. "The supply of housing facility for Mr. Rick" Explain your answer for the following statements whether they are Macroeconomics or Microeconomics and why? 

IV. "The Omanisation Process is also the focal point in Vision 2040" Explain your answer for the following statements whether they are Macroeconomics or Microeconomics and why? 

Answer 1

Question I: Explain in your own words any three macroeconomic variables from Great Depression?

What Is Macroeconomics?

Macroeconomics is a branch of economics that studies how an overall economy—the market systems that operate on a large scale—behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.

Some of the key questions addressed by macroeconomics include: What causes unemployment? What causes inflation? What creates or stimulates economic growth? Macroeconomics attempts to measure how well an economy is performing, to understand what forces drive it, and to project how performance can improve.

There are two sides to the study of economics: macroeconomics and microeconomics. As the term implies, macroeconomics looks at the overall, big-picture scenario of the economy. Put simply, it focuses on the way the economy performs as a whole and then analyzes how different sectors of the economy relate to one another to understand how the aggregate functions. This includes looking at variables like unemployment, GDP, and inflation. Macroeconomists develop models explaining relationships between these factors. Such macroeconomic models, and the forecasts they produce, are used by government entities to aid in the construction and evaluation of economic, monetary and fiscal policy; by businesses to set strategy in domestic and global markets; and by investors to predict and plan for movements in various asset classes.

Given the enormous scale of government budgets and the impact of economic policy on consumers and businesses, macroeconomics clearly concerns itself with significant issues. Properly applied, economic theories can offer illuminating insights on how economies function and the long-term consequences of particular policies and decisions. Macroeconomic theory can also help individual businesses and investors make better decisions through a more thorough understanding of what motivates ot, andarties and how to best maximize utility and scarce resources.

Macroeconomics deals with the performance, structure, and behavior of the entire economy, in contrast to microeconomics, which is more focused on the choices made by individual actors in the economy ((like people, households, industries, etc.).

History of Macroeconomics - While the term "macroeconomics" is not all that old (going back to Ragnar Frisch in 1933), many of the core concepts in macroeconomics have been the focus of study for much longer. Topics like unemployment, prices, growth, and trade have concerned economists almost from the very beginning of the discipline, though their study has become much more focused and specialized through the 1990s and 2000s. elements of earlier work from the likes of Adam Smith and John Stuart Mill clearly addressed issues that would now be recognized as the domain of macroeconomics.

Macroeconomics, as it is in its modern form, is often defined as starting with John Maynard Keynes and the publication of his book The General Theory of Employment, Interest and Money in 1936. Keynes offered an explanation for the fallout from the Great Depression, when goods remained unsold and workers unemployed. Keynes's theory attempted to explain why markets may not clear.

There are 4 main macroeconomic variables that policymakers should try and manage: Balance of Payments, Inflation, Economic Growth and Unemployment.

1. Balance of Payments
2. Inflation
3. (Economic) Growth
4. Employment

1.The Balance of Payments is the difference between the total amount of goods a country exports (sells to other countries) and the total amount of goods a country imports (buys from other countries). This can be simplified to X-M.If the amount of goods that a country exports (X) is greater than the amount of goods that a country imports (M), there is a balance of payments surplus because X>M.If the amount of goods that a country exports (X) is less than the amount of goods that a country imports (M), there is a balance of payments deficit because X.

2. Inflation is the amount that the cost of goods and services within an economy has increased over a given time period (usually measured over a year). In the UK, this is measured using the Consumer Price Index (CPI). Inflation is damaging to an economy and this means that policymakers tend to try and keep inflation low. For example, the Bank of England aim to set inflation at around 2%. There are 2 types of inflation, cost-push inflation (which is caused by the costs of production for firms increasing, forcing them to put their sale prices up) and demand-pull inflation (which is caused by growing demand for goods that firms produce, allowing firms to increase prices to gain more profit).

3. Economic growth is the amount that the level of output within an economy increases over a given time period (again usually measured over a year). Economic growth is extremely desirable as it means that, in general, the people within an economy are getting richer. Economic growth can be increased in a number of ways, such as technological improvement, an increase in the demand for goods and services, and an increase in the size of the workforce (a fall in unemployment).

4. Unemployment is the amount of people within an economy who are willing and able to work, but do not have a job. There are a number of different types of unemployment. Frictional unemployment (which is unemployment caused by the search for a new job or a transition between jobs), structural unemployment (caused by the decline of an industry, for example type-writing or coal mining), seasonal unemployment (caused by the time of year, for example working on a Christmas tree farm is undesirable during summer), and cyclical unemployment (which is caused by a recession – a reduction in the level of output within an economy).

Question II: Explain your answer for the following statements whether they are macroeconomics or microeconomics and why?

Before getting on to the statement let's understand the following:

Macroeconomics

Macroeconomics is a branch of economics that studies how an overall economy—the market systems that operate on a large scale—behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.

Some of the key questions addressed by macroeconomics include: What causes unemployment? What causes inflation? What creates or stimulates economic growth? Macroeconomics attempts to measure how well an economy is performing, to understand what forces drive it, and to project how performance can improve.

Macroeconomics deals with the performance, structure, and behavior of the entire economy, in contrast to microeconomics, which is more focused on the choices made by individual actors in the economy ((like people, households, industries, etc.).

Microeconomics

Microeconomics is a branch of economics that studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce efficient results.

While microeconomics focuses on firms and individuals, macroeconomics focuses on the sum total of economic activity, dealing with the issues of growth, inflation, and unemployment and with national policies relating to these issues.Microeconomics also deals with the effects of economic policies (such as changing taxation levels) on microeconomic behavior and thus on the aforementioned aspects of the economy. Particularly in the wake of the Lucas critique, much of modern macroeconomic theories has been built upon microfoundations—i.e. based upon basic assumptions about micro-level behavior.

I. "The Price of Camel" .Explain your answer for the following statements whether they are macroeconomics or microeconomics and why?

This statement is  Macroeconomic because Camel is an internal supervisory tool for evaluating the soundness of a financial institution. The CAMEL-based rating reviews different aspects of a bank with respect to a financial statement, funding sources, macroeconomic data, and cash flow. CAMEL is an acronym for five components of bank factors:

• Capital adequacy
• Asset quality
• Management quality
• Earning ability
• Liquidity

II. "The Growth and Development of Oman Economy".Explain your answer for the following statements whether they are macroeconomics or microeconomics and why?

This statement is macroeconomics as Oman is heavily dependent on oil and gas resources, which can generate between and 68% and 85% of government revenue, depending on fluctuations in commodity prices.

In 2016, low global oil prices drove Oman’s budget deficit to $13.8 billion, or approximately 20% of GDP, but the budget deficit is estimated to have reduced to 12% of GDP in 2017 as Oman reduced government subsidies, According to the World Factbook of the CIA.

Oman is using enhanced oil recovery techniques to boost production, but it has simultaneously pursued a development plan that focuses on diversification, industrialization, and privatization, with the objective of reducing the oil sector’s contribution to GDP.

The key components of the government’s diversification strategy are tourism, shipping and logistics, mining, manufacturing, and aquaculture.Muscat also has notably focused on creating more Omani jobs to employ the rising number of nationals entering the workforce. However, high social welfare benefits – that had increased in the wake of the 2011 Arab Spring – have made it impossible for the government to balance its budget in light of current oil prices.In response, Omani officials imposed austerity measures on its gasoline and diesel subsidies in 2016. These spending cuts have had only a moderate effect on the government’s budget.

III. "The supply of Housing facility for Mr. Rick".Explain your answer for the following statements whether they are macroeconomics or microeconomics and why?

This statement is Microeconomic as it is the study of individuals, households and firms' behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.Microeconomic study deals with what choices people make, what factors influence their choices and how their decisions affect the goods markets by affecting the price, the supply and demand.
Therefore, Mr. Rick is an individual .

IV. "The Omanisation process is also the focal point in vision 2040".Explain your answer for the following statements whether they are macroeconomics or microeconomics and why?

This statement is microeconomic. In terms of human development, Vision 2040 aims at providing a society with a creative core through an all-inclusive, sustainable teaching system with community participation and a focus on human development in education, as well as an increase in scientific research fueled by diversified funding for teaching and research.
Vision 2040 also aims to have a leading healthcare system with international standards focused on health as a community responsibility, a decentralised, transparent healthcare system with varied funding and nationally qualified manpower.