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Chapter 1: Q.5 (page 24)

What would be another example of a “system” in the real world that could serve as a metaphor for micro and macroeconomics?

Short Answer

Expert verified

Solar system is an example.

Step by step solution

01

Concept

In the real world, there are various examples of 'systems' that can be used as metaphors for microeconomic and macroeconomic issues. Lake is the best illustration of a biological system. Microeconomics is concerned with the individual, whereas macroeconomics is concerned with the broader economy.

02

Explanation

Microeconomics is concerned with the individual, whereas macroeconomics is concerned with the broader economy. Another case in point is the investigation of individual planets and the solar panel as a whole. The study of planets is focused on the microeconomic system, while the study of solar panels is focused on the macroeconomic system.

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