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Questions and Answers
What is the primary focus of microeconomics?
What is the primary focus of microeconomics?
- Studying individual markets and decision-making of individuals and firms (correct)
- Analyzing national economic policies and their effects
- Building macroeconomic theories upon microfoundations
- Dealing with issues of growth, inflation, and unemployment
What is one of the goals of microeconomics?
What is one of the goals of microeconomics?
- Dealing with national policies and economic issues
- Analyzing market mechanisms and allocation of limited resources (correct)
- Studying the effects of economic policies on macroeconomic behavior
- Building macroeconomic theories upon microfoundations
What does microeconomics show conditions for?
What does microeconomics show conditions for?
- Desirable allocations in free markets (correct)
- Building modern macroeconomic theories upon microfoundations
- National policies relating to growth, inflation, and unemployment
- Market mechanisms and relative prices among goods and services
What aspect of the economy does macroeconomics primarily deal with?
What aspect of the economy does macroeconomics primarily deal with?
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What has much of modern macroeconomic theories been built upon?
What has much of modern macroeconomic theories been built upon?
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Study Notes
Microeconomics
- Primary focus of microeconomics: individual economic units, such as households, firms, and markets
- One of the goals of microeconomics: to understand the behavior and decision-making processes of these units
Characteristics of Microeconomics
- Shows conditions for: optimal allocation of resources in a market economy
Macroeconomics
- Primarily deals with: the economy as a whole, focusing on aggregate variables such as GDP, inflation, and unemployment
- Much of modern macroeconomic theories have been built upon: the work of John Maynard Keynes
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