Classify the following topics as relating to microeconomics or macroeconomics.
a. A family’s decision about how much income to save.
b. The effect of government regulations on auto emissions.
c. The impact of higher national saving on economic growth.
d. A firm’s decision about how many workers to hire.
e. The relationship between the inflation rate and changes in the quantity of money.
All of the following topics fall within the study of microeconomics except:
a. the impact of cigarette taxes on the smoking behavior of teenagers.
b. the role of Microsoft s market power in the pricing of software.
c. the effectiveness of antipoverty programs in reducing homelessness.
d. the influence of the government budget deficit on economic growth.
Answer to question 1
The family’s decision about how much income to spend on food. – Microeconomics
The effect of government regulations on auto emissions.- Microeconomics
The impact of higher public savings on economic growth.- Macroeconomics
A monopolist’s decision about how many units to sell. – Microeconomics
The relationship between the inflation rate and the unemployment rate. – Macroeconomics
Economic growth, inflation, GDP and unemployment are few macroeconomic issues.
Production or consumption decisions of a firm or section of society are microeconomics issues
Answer to question 2
d. the influence of the government budget deficit on economic growth
Economic growth talks about the overall economy on the central part. When the context of economic growth is discussed, then it entails all concepts that are related to the macro portion of an economy. Besides that, the government is a proper entity that possesses the responsibility of regulating the overall economy. Hence, this concept does not have anything to do with microeconomics.