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Which of the following is primarily a macroeconomic issue rather than a microeconomic...

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jose213 | Student, College Freshman | eNoter

Posted September 3, 2012 at 5:53 PM via web

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Which of the following 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 September 3, 2012 at 6:03 PM (Answer #1)

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Of these, only B is a macroeconomic issue.  All of the others are primarily microeconomic issues.

Macroeconomics is the study of the economy as a whole.  By contrast, microeconomics looks at decisions that are made by such entities as individuals, households, firms, or single industries.  Using this definition, we can see that A, C, and D are microeconomic issues.  A is a decision on the part of a firm, C on the part of a household, and D on the part of an individual.  

By contrast, B looks at the whole economy.  It looks at a decision taken by a government and examines its impact on all people in an economy.

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