Question

Does the following condition apply to Macroeconomics or Microeconomics

A. Chase Bank lowered its prime rate by 1/2% point.

B. The Federal Funds rate is 2.2%.

C. Due to a bull market in the housing industry, the price of homes increased by 30%.

D. Because of an unusual amount of rain in Hawaii, the Kona coffee crop is expected to decrease by 25%.

E. The consumer price level is 256.14.

Answer 1

a) Bank lowering the prime rate is a micro economic situation because it involves only a single bank.

b) The Federal fund rate is a macro economic situation because it involves the economy as a whole.

c) This is related to one particular industry hence it will be considered as a micro economics.

d) This is also related to one particular industry in the market hence it will be part of micro economics.

e) It is related to the economy as a whole so it will be considered as macro economics.