1.4 Microeconomics and Macroeconomics – Flashcards
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A primary difference between macroeconomics and microeconomics is
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Microeconomics examines individual markets while macroeconomics examines the economy as a whole.
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1. Macroeconomics is the study of 2. Microeconomics is the study of 3.The level of total investment by firms in new machinery and equipment helps to determine how rapidly the economy grows. This is a __________ issue. However, to understand how much new machinery and equipment firms decide to purchase, one must analyze the incentives individual firms face, which is a ___________ issue.
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1. the economy as a whole, including topics such as inflation, unemployment, and economic growth. 2. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices. 3. macroeconomics, microeconomics
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a. The effect of higher cigarette taxes on the quantity of cigarettes sold. This is a ________ issue. b. The effect of higher income taxes on the total amount of consumer spending. This is a ________ issue. c. The reasons for the economies of East Asian countries growing faster than the economies of sub-Saharan African countries. This is a _________ issue. d. The reasons for low rates of profit in the airline industry. This is a _________ issue.
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a. microeconomic b. macroeconomics c. macroeconomics d. microeconomics
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1. Which of the following areas of economics studies issues such as ways to reduce teenage smoking? 2. Which of the following areas of economics studies issues such as whether government intervention is capable of reducing the severity of recessions?
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1. Microeconomics 2. Macroeconomics
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1. Which of the following statements about microeconomics and macroeconomics is correct? 2. Which of the following statements about microeconomics and macroeconomics is correct?
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1. Microeconomics involves the study of how households and firms make choices. 2. Macroeconomics is the study of the economy as a whole.
