Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Introduction

Question:

Which of the following deals with macroeconomics?
i. Employment condition of the country as a whole
ii. Determination of equilibrium in perfect competition
iii. Steps which can be taken by state to improve its economic condition
iv. Will the prices as a whole rise or come down?

Options:

i, ii, iii, iv

ii, iii, iv

i, iii, iv

ii only

Correct Answer:

i, iii, iv

Explanation:

The correct answer is option 3: i, iii, iv

Determination of equilibrium quantity and price is done in microeconomics. The rest questions are the broad economic questions that concern all citizens and hence come under the purview of macroeconomics.

Here's the reasoning for each option:

i. Employment condition of the country as a whole: Macroeconomics concerns itself with aggregate economic variables of an economy, and employment is one of the key indicators of the overall health of an economy. Macroeconomists study factors influencing aggregate employment levels, such as labor market dynamics, government policies, and business cycles.

ii. Determination of equilibrium in perfect competition: This aspect primarily falls under microeconomics rather than macroeconomics. Microeconomics analyzes the behavior of individual markets and firms, including the determination of equilibrium prices and quantities in specific market structures like perfect competition.

iii. Steps which can be taken by the state to improve its economic condition: Macroeconomics encompasses the study of government policies and interventions aimed at influencing the overall performance of the economy. This includes fiscal policies (such as taxation and government spending) and monetary policies (such as interest rate adjustments) designed to achieve macroeconomic objectives like economic growth, price stability, and full employment.

iv. Will the prices as a whole rise or come down?: This is a question about inflation, a core concept in macroeconomics. Macroeconomics studies factors affecting inflation, such as money supply, aggregate demand, and production costs.