Topic 1 - What Is Economics Macro

Question 1

Difference between Microeconomics and Macroeconomics?

Answer 1

Microeconomics focuses on the individuals perspective at a consumer level whereas macroeconomics seeks to find a general perspective at a national level

Question 2

Free market economy

Answer 2

In a ‘free market economy’ goods are allocated using the price mechanism

Question 3

Advantages of a free market economy

Answer 3

Less government interference - Organizations can invest extra money towards other endeavours like new research and development opportunities
Naturally promotes equality - Each person gets the opportunity to discover success.

Question 4

Disadvantages of free market economy

Answer 4

Profit is always the motive for success in a free market economy
Market failures can create severe recessions and cause economic consequences
A free market economy requires consumption to survive