Determine whether each of the following topics would more Nkely be studied in microeconomics or macroeconomics.
Microeconomics and macroeconomics
Determine whether each of the following topics would more Nkely be studied in microeconomics or macroeconomics.
| Microeconomics | Macroeconomics | |
| The optimal interest rate for the Federal Reserve to target | ||
| The effects of government tax policy on long-term economic growth | ||
| The effect of government regulation on a monopolist's production decisions |
Homework Answers
Microeconomics is the study of the economy at individual, group
or company level. It deals with individual decisions, which affect
a small number of people.
Macroeconomics is the study of economics at a whole. It deals with
aggregates.
1. The optimal interest rates that Fed targets affects the whole
economy and influence all other rates in the economy. Hence, it
would be studied under MACROECONOMICS.
2. Effects of government tax policy is again associated with
economy as a whole and it also affects long term economic growth.
Hence, it would be studied under MACROECONOMICS.
3. Effect of government regulation on a monopolist's production
decisions affect only the economic decisions of a company even
though it is a monopolist. Hence, it would be studied under
MICROECONOMICS.
ANSWER :
First one : Macroeconomics
Second one : Macroeconomics
Third one : Microeconomics
Add Answer to:
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