Below are three statements. Indicate whether each one pertains to microeconomics or macroeconomics. In a sentence, explain why you chose the answer you did.

a. "The inflation rate in the United States hit its lowest level in the last twenty years."

b. "The nation's economy grew at an annual rate of 3.7 percent in the final quarter of the year."

c "General Motors plans to spend $800 million on a new automobile plant."

Solutions

Expert Solution

Microeconomics and macroeconomics are the two subparts of the economics
In Microeconomics we study the behavior of a small individual or a firm, for example, demand-supply, pricing, production, consumption, etc.
In macroeconomics, the consideration is taken for the whole economy of the nation, for example, unemployment rate, inflation rate, economic growth, etc.

1. Since in the first state statement, it is talking about the inflation rate which means at a macro level, so it will be categorized under macroeconomics

2. In the second statement also it is talking about the nation's economic growth rate at 3.7 % which means it is talking for the whole Nation.

so categorized under macroeconomics

3. In the third statement talking about a firm called General Motors which spend around 800 million dollars for a new automobile plant.

In this statement, we are dealing with a firm at a smaller level hence will categorize under microeconomics

Rahul Sunny answered 2 years ago

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