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Of the following, which one is primarily a macroeconomic issue rather than...

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xnoe323x | Student, College Freshman | Salutatorian

Posted August 31, 2012 at 3:44 PM via web

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Of the following, which one is primarily a macroeconomic issue rather than a microeconomic issue? 

a. What price to charge for an automobile
b. Measuring the impact of tax policies on total consumer spending in the economy
c. A household’s decisions about what to buy
d. A worker’s decision regarding how much to work each week

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted August 31, 2012 at 4:02 PM (Answer #1)

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Of the choices listed here, the only one that is primarily a macroeconomic issue is B.  All of the rest are primarily microeconomic issues.

Macroeconomic issues are ones that have to do with the economy as a whole.  By contrast, microeconomic issues have to do with one firm or one household or one industry.  A, C, and D clearly fall under microeconomics.  Both C and D are decisions made by an individual based largely on his/her circumstances and tastes.  A has only to do with one industry.  By contrast, B looks at the impact of an economy-wide policy (taxes) on the behavior of all consumers.  This is a macroeconomic issue.

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