For each of the following statements, indicate whether the statement relates to macroeconomics or microeconomics. [Each...

For each of the following statements, indicate whether the statement relates to macroeconomics or microeconomics. [Each is 2 points]

a. Unemployment soars in Spain

b. The price of gasoline in the United States has increased this year

c. The U.S. government cuts taxes to combat a recession

d. The quantity of wheat grown in the United States this year is higher than last year’s wheat production. e. Delta Airlines has changed its fares in response to an increase in jet fuel prices.

Solutions

Expert Solution

Microeconomics deals with the behaviour of individuals and firms like consumer utility, demand and supply.

Macroeconomics deals with the economy as a whole, for example, unemployment, inflation, money supply.

a. Macroeconomics as it deals with unemployment.

b. Microeconomics as it deals with individual products and not price levels.

c. Macroeconomics as it deals with taxation affecting the whole economy.

d. Microeconomics as it deals with markets for goods and services

e. Microeconomics as it deals with decision making of a firm i.e. Delta Airlines.

Rahul Sunny answered 1 year ago

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