Question

1. Label each entry in the list below as dealing with a microeconomic topic or a macroeconomic topic. Explain your answer.

• Local car sales in India grow at their slowest pace in two years.-
• Coffee prices rocket.- T
• Globalization has reduced African poverty.
• The government must cut its deficit.
• Apple sells 2 million iPhones a month

Answer 1

• Local car sales in India grow at their slowest pace in two years.- Macroeconomic topic
• Coffee prices rocket.- Microeconomic topic
• Globalization has reduced African poverty. - Macroeconomic topic
• The government must cut its deficit. - Macroeconomic topic
• Apple sells 2 million iPhones a month - Microeconomic topic

Explanation: Macroeconomics deals with the economy as a whole and economic factors at the aggregate level. Therefore, it includes the sales level in the entire country or poverty level in a country or the government deficit. On the other hand, microeconomics deals with economic issues in the individual level or the firm level.