Three of the following are studied in macroeconomics. Pick the odd one out.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → How the price of tea is determined in the market for tea
Macroeconomics studies the economy as a whole, through aggregate measures such as total output, employment and the aggregate price level. How the price of one good is set in its own market is a question of microeconomics.
Option (1) The aggregate price level of the economy — True. The aggregate price level is a measure of the whole economy.
Option (2) The level of total employment in the economy — True. Total employment is an aggregate measure.
Option (3) How the price of tea is determined in the market for tea — False. The price of tea is fixed in one market, by its buyers and sellers.
Option (4) How the total output of the economy grows over time — True. How total output grows over time is a macro question.
NCERT (2026-27): “1.5 Microeconomics and Macroeconomics … In microeconomics, we study the behaviour of individual economic agents in the markets for different goods and services and try to figure out how prices and quantities of goods and services are determined through the interaction of individuals in these markets. In macroeconomics, on the other hand, we try to get an understanding of the economy as a whole by focusing our attention on aggregate measures such as total output, employment and aggregate price level. Here, we are interested in finding out how the levels of these aggregate measures are determined and how the levels of these aggregate measures change over time.” |