Question

Consider the list of economic questions and issues below. Which are microeconomic issues, and which are macroeconomic issues? Place each item in the correct column. How much will the economy grow next year? Why do economics majors earn more than marketing majors? How does Apple decide how many iPads to produce? Why does the unemployment rate increase during a recession? What happens to prices when the government increases the money supply? Which company’s stocks should your mother buy? Should the government pass a jobs bill to stimulate the economy? Why does the price of gasoline increase during the summer? Categories Macroeconomics Drag and drop here Microeconomics Drag and drop here

Answer 1

Answer:

See explanation section

Explanation:

1. How much will the economy grow next year? - This is a macroeconomic issue. Macroeconomic deals with the economy as a whole. It also deals with the large-scale structure and performance of an industry, behavior, and decision making of a country. Macroeconomic issues include global or national economies. Since the question is about whether an economy grows, it is about entire country's economy.

2. Why do economics majors earn more than marketing majors? - Microeconomics issue. Generally, microeconomics issues deal with the individual level and firm-level decision-making. Since the question does not involve whole the industry or economy, it is a microeconomics issue. Instead the question is about whether the major of economics students earn more or less. It is only about an individual level topic.

3. How does Apple decide how many iPads to produce? - Microeconomics issue as we are talking about only Apple company. Since it is an individual level economics, it is micro issue.

4. Why does the unemployment rate increase during a recession? - As the question is related to a country's unemployment, it deals with the overall economy. So, it is Macroeconomic issue. Unemployment generally covers the whole economy of a country because it suggests how many people are unemployed in an economy.

5. What happens to prices when the government increases the money supply? - Macroeconomic issue as money supply is for the whole economy. Money supply is the total value of a country's economy. Therefore, money supply is a macroeconomic-related topic.

6. Which company’s stocks should your mother buy? - Microeconomics issue as your mother will not purchase all of the company's stock. It is an individual level purchase. It means only one person will purchase the stock, which is a microeconomics issue.

7. Should the government pass a jobs bill to stimulate the economy? - Again, If anything is related to the large-scale and whole economy, it will be a macroeconomic issue. Since the government should pass the bill to stimulate economy which is for the country's economy, it is a macroeconomic issue.

8. Why does the price of gasoline increase during the summer? - Only the price of gasoline and not other petroleum related products, so it is a microeconomics issue. It is not for the large-scale and industry level issue. Instead it is only a part of a petroleum corporation.