Economics: Macroeconomic and Microeconomic Factors

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What is the main focus of microeconomics?

Individual and business decisions regarding the allocation of resources and prices of goods and services.

What are the applications of microeconomics?

Trade, industrial organization and market structure, labor economics, public finance, and welfare economics.

What is the difference between positive economics and normative economics?

Positive economics seeks to understand behavior and the operation of systems without making judgements, while normative economics analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action.

What are the purposes of economic models?

Simulations and forecasting. Signup and view all the answers

What are the criteria for judging economic outcomes?

Efficiency, equity, growth, and stability. Signup and view all the answers

What is allocative efficiency in economics?

An efficient economy is one that produces what people want at the least possible cost. Signup and view all the answers

What is meant by 'counterfactual' in economic models?

Relates to or expresses what is not the case or has not happened. Signup and view all the answers

What is the main focus of descriptive economics?

The compilation of data that describe phenomena and facts. Signup and view all the answers

What is the focus of economic theory?

A statement or set of related statements about cause and effects, action and reaction. Signup and view all the answers

What is the difference between forecasting and simulations in economic models?

Forecasting predicts future economic conditions, while simulations explore hypothetical changes in economic variables. Signup and view all the answers

Define macroeconomics and provide an example of a macroeconomic factor.

Macroeconomics examines the economy as a whole. An example of a macroeconomic factor is the unemployment rate affecting the gross domestic product (GDP). Signup and view all the answers

Explain the difference between macroeconomics and microeconomics.

Macroeconomics examines the economy as a whole, including national income and general price level, while microeconomics focuses on specific economic units like individual firms, households, and specific products and resources. Signup and view all the answers

What does microeconomics focus on, and how does it differ from macroeconomics?

Microeconomics focuses on specific economic units like individual industry, firm, or household, as well as the price of specific products and resources. It differs from macroeconomics in that it examines specific units rather than the overall economy. Signup and view all the answers

Explain the term 'aggregate expenditures' in the context of macroeconomics.

Aggregate expenditures refer to the total amount of spending in an economy on all final goods and services during a specific time period. Signup and view all the answers

Describe the main focus of macroeconomics and provide an example.

The main focus of macroeconomics is to examine the economy as a whole. An example is analyzing how the unemployment rate affects the gross domestic product (GDP). Signup and view all the answers

What is the primary concern of microeconomics, and how does it differ from macroeconomics?

The primary concern of microeconomics is specific economic units like individual industry, firm, or household, as well as the price of specific products and resources. It differs from macroeconomics in that it focuses on analyzing individual units within the economy rather than the economy as a whole. Signup and view all the answers