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Chapter 1: Q 5. (page 24)

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

Short Answer

Expert verified

Solar system is an example.

Step by step solution

01

Step 1. Meaning of micro and macroeconomics.

Microeconomics focuses on the actions of particular agents within the economy, such as households, workers, as well as business firms is termed as microeconomics.

Whereas on the other hand, macroeocnomics focuses on broad issues such as unemployment, inflation, growth and trade balance is termed as macroeconomics.

02

Step 2. The system in real world.

The solar system could work as a metaphor. The study of a single planet in the whole system is similar to the study of microeconomics while. On the other hand, the study of the solar system as a whole represents macroeconomics.

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Most popular questions from this chapter

Why would division of labor without trade not

work?

If a central bank uses the tools of monetary policy to reduce the demand for goods and services, the likely result is __ inflation and __ unemployment in the short run.

  1. Lower; lower
  2. Lower; higher
  3. Higher; higher
  4. Higher; lower

Why isn’t trade among countries like a game in which one country wins and the other loses?

A balanced federal budget and a balance of trade

are secondary goals of macroeconomics, while growth

in the standard of living (for example) is a primary goal.

Why do you think that is so?

What is scarcity? Can you think of two causes of scarcity?
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