Explain the difference between Microeconomics and Macroeconomics
What will be an ideal response?
Microeconomics and macroeconomics differ in the economic unit on which they focus. Microeconomics focuses on the individual economic agent, i.e., the consumer or the firm. Whereas macroeconomics considers the economy as a whole. There is a close link between the two branches, however, because many macroeconomic relationships are based on aggregate versions of the behavioral relationships derived on the microeconomic level.
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In the classical theory of aggregate demand, a decrease in the velocity of money leads to
a. a downward shift in the aggregate demand curve, a fall in prices, and no change in output. b. an increase in the aggregate demand curve, a rise in prices, and no change in output. c. no change in aggregate demand or supply because higher velocity increases the money supply. d. an upward shift in the aggregate demand curve, a fall in prices, and no change in output.
A cartel is a group of firms that attempts to
A) maximize joint revenue. B) maximize joint profit. C) behave independently. D) increase consumer surplus.