UNIT 4: MACROECONOMIC

Question 1

What are two major of macroeconomic policies?

Answer 1

Fiscal policy & monetary policy.

Question 2

What are two main tools of fiscal policy?

Answer 2

G’s spending & taxation.

Question 3

What are three main tools of monetary policy?

Answer 3

Reserve requirements, discount rates, open market operations.

Question 4

What are the main objectives of these two policies?

Answer 4

Two policies are used to promote economic growth, reduce unemployment and control inflation.

Question 5

Why is it said that microeconomics and macroeconomics are interdependent and complement each other?

Answer 5

Because there are many overlapping issues between the two fields.

Question 6

What is GDP?

Answer 6

GDP is the total value of all goods and services produced by a country in a year.

Question 7

What does macroeconomics study?

Answer 7

Macroeconomics studies interactions among all economic factors in the whole economy and in international marketplace.

Question 8

What are differences between microeconomics and macroeconomics?

Answer 8

Micro

• It focuses on behavior of particular individuals and firms.
• Specifically, micro analyzes how consumers, workers and firms can best make trade-offs based on their limited resources.
• All these trade-offs are determined by prices and prices are determined by the law of supply and demand.

                            Macro

• Macro focuses on interactions among all economic factors.
• Especially, it analyzes how G regulate the economy by making changes to macroeconomic policies.
• It also analyses the self-regulation of markets as well as economic relations of different countries in the world.

Question 9

SUMMARY

Answer 9

There are some main ideas in Unit 4.
Firstly, macroeconomics studies interactions among all economic factors in the whole economy and in international marketplace.
Secondly, macroeconomics is influenced by macroeconomic policies such as monetary policy determining the money supply and supervised by central banks; and fiscal policy determining G’s revenue and spending & supervised by Ministry of Finance.
Finally, there are some differences between microeconomics and macroeconomics. For example, microeconomics focuses on behavior of particular individuals and firms, whereas macroeconomics focuses on interactions among all economic factors.