5 Questions
What does microeconomics analyze?
Individual agents and markets
What does macroeconomics analyze?
Economy as a system and factors affecting it
What is the distinction between positive economics and normative economics?
Describing 'what is' vs advocating 'what ought to be'
What are the elements analyzed in macroeconomics?
Production, consumption, saving, and investment
What are the broad distinctions within economics?
Between economic theory and applied economics
Study Notes
Microeconomics and Macroeconomics
- Microeconomics analyzes the behavior and decision-making processes of individual economic units, such as households, firms, and markets.
- Macroeconomics analyzes the economy as a whole, focusing on aggregate variables, such as national income, employment, and inflation.
Positive and Normative Economics
- Positive economics analyzes what is, describing and predicting economic phenomena, without making value judgments.
- Normative economics analyzes what ought to be, making value judgments and policy recommendations, based on economic analysis.
Elements of Macroeconomics
- Gross Domestic Product (GDP)
- National income
- Employment
- Inflation
- Economic growth
Broad Distinctions within Economics
- Microeconomics (individual economic units)
- Macroeconomics (the economy as a whole)
- Positive economics (descriptive and predictive)
- Normative economics (prescriptive and evaluative)
Test your knowledge of microeconomics with this quiz! Explore the fundamental concepts of individual agents, markets, and interactions within the economy. Challenge yourself with questions on supply and demand, market structures, and economic decision-making.
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