Question

The impact of higher taxes would be examined by:

Answer 1

Answer:

The correct answer is letter "C": both a macroeconomist and a microeconomist.

Explanation:

While microeconomics studies the economic decisions made by individuals, macroeconomics studies the phenomena occurring in the overall market and the influence of governments in it. In that case, the impact of higher taxes will be subject to discussion for the government to find out what the consequences in the overall market could be but individuals also will worry about this matter because it is likely to affect their income and purchasing power.

Answer 2

Answer:

C. Both a Macro Economist & Micro Economist

Explanation:

Micro Economics is the study of single individual consumer, firm, industry. Eg-Single commodity price.

Macro Economics is the study of all consumers, firms & industries - studying economy as a whole. Eg: General price level.

Impact of higher tax can be on  :  

• On supply, demand of that particular good on which tax is levied (concern of Micro Economics). Micro Economic Concept Eg: Supply is inversely related to tax component of 'government policies' factor.
• On aggregate demand, aggregate supply of the economy as a whole (concern of Macro Economics). Macro Economic Concept Eg : AD = C+I+G+NX, government expenditure decrease (tax increase) reduces AD.

So: Impact of higher tax can be examined by both Micro Economist & Macro Economist, depending upon the kind of study.