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Published on: 27/07/2018
The chapter Introductory Macroeconomics contains important questions in CBSE 12th Standard Introductory Microeconomics and Macroeconomics. It also covered with the most important questions in Introductory Macroeconomics.
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Questions + Answers key
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1.
What is the scope of macroeconomics?
2.
Distinguish between microeconomics and macroeconomics.
3.
What is the difference between microeconomics and macroeconomics?
4.
Is the study of cotton textile industry a macroeconomic study or a microeconomic study?
5.
What is a macroeconomic paradox?
6.
Give one example of 'externality' which reduces welfare of the people.
7.
Mention any two macroeconomics events.
8.
Describe the four major sectors in an economy according to the macroeconomic point of view.
9.
What is microeconomics?
10.
Define macroeconomics.
11.
What do you understand by macroeconomics?
12.
What is the name of Keynesian book published in 1936?
13.
J. M. Keynes was a _________ economist.
14.
Aggregate Demand is the sum total of consumption and _______.
15.
Macro means ________ agents.
16.
Micro means _________ agents.(small/large)
17.
________ was the founder father of modern economics.
18.
The mother of all economic problems is ________.
19.
Mr. Skund Kumar wants to study the national income. Which branch of economics will he have to study?
Microeconomics
Price theory
Factor price determination
Macroeconomics
20.
When was the famous book of Prof. Keynes published?
1930
1931
1936
1940
21.
What is the name of the book written by J.M. Keynes?
Wealth of Nation
Political economy
The General Theory of Employment, Interest and Money
None of these
22.
Are micro and macroeconomics dependent on each other?
No
Yes
Never
Sometimes
23.
What are the methods of economic analysis?
Macroeconomics
Microeconomics
Both of these
None of these
24.
What is known as the study of individual units?
Macroeconomics
Microeconomics
Income and Employment Theory
Development economics
1.
The scope of macroeconomics can be described as below:
(i) Theory of Income and Employment: Macroeconomics studies national income, its different assumptions, methods of measurements, social accounting, etc. It also includes study related to determination of equilibrium level of income and employment. National income and the level of employment depend upon effective demand. For the analysis of effective demand, total demand, total supply, total consumption, total investment, total saving, multiplier etc. are studied.
(ii) Theory of Money: In macroeconomics, the principles of capital are studied. Macroeconomics also studies the functions of money, changes in demand for and supply of money, and theories relating to money, banks and financial institutions.
(iii) Theory of Trade Cycles: Macroeconomics studies the fluctuations in the country's economic activities such as aggregate production, employment, interest rates, trade, general price level, etc.
(iv) Macro Theory of Distribution: It deals with the study of relative shares of labourers and capitalists, in the form of wages and profits respectively, in the total national income.
(v) Theory of Growth: Macroeconomics studies the rate and level of economic development. Economic growth includes growth or changes due to increase in per capita real income. Public finance and financial policies of the government can also be studied by using macroeconomics.
2.
In microeconomics, we study the behaviour of individual decision-making units such as households and firms. Equilibrium prices and quantities of goods and services are determined through the interaction of individuals in the market. In macroeconomics, on the other hand, we study the behaviour of factors affecting the economy as a whole. It focuses on the behaviour of national level aggregates such as national income, total output, employment level, price level, etc. Here, the levels of these aggregate measures are determined and how the levels of these aggregate measures change overtime.
3.
Following points explain the difference between microeconomics and macroeconomics:
| S.No. | Microeconomics | Macroeconomics |
|---|---|---|
| 1. | Microeconomics facilitates decisions of individual households, firms or other organisations. | Macroeconomics focuses on the economy as a whole. |
| 2. | Microeconomics focuses on market forces of demand and supply and determines equilibrium price levels. | Macroeconomics focuses on increasing economic growth. It studies the changes in the national income and various other national level aggregates. |
| 3. | Microeconomics takes a bottoms-up approach in analysing the economy. | Macroeconomics takes a top-down approach in analysing the economy. |
4.
The study of cotton textile industry is a microeconomic study.
5.
Macroeconomic paradox is a term that captures the point that what may be true for an individual might not essentially be true for the economy as a whole.
6.
Air pollution is an externality which reduces welfare of the people.
7.
Two macroeconomics events:
(i) Level of employment
(ii) Rate of inflation
8.
Following are the four major sectors in an economy:
(i) Household Sector: By household, we mean a group of individuals who purchase goods and services for consumption.
(ii) Firm/Production Sector: The production units are called firms. The firm sector includes all the units that buy factors of production from households.
(iii) Government Sector: The role of the government sector includes framing laws, enforcing them and delivering justice. The government, in many instances, undertakes production apart from imposing taxes and spending money on building public infrastructure, running schools, colleges, providing health services, etc.
(iv) External Sector: The external sector includes exports and imports of goods and services. Capital from foreign countries may also flow into the domestic country, or the domestic country may be exporting capital to foreign countries.
9.
( )
Microeconomics is the branch of economics that studies the behaviour of individual decision making units such as households and firms. Equilibrium prices and quantities of goods and services are determined through the interaction of individuals in the market.
10.
( )
Macroeconomics is the branch of economics that studies the behaviour of factors affecting the economy as a whole. It focuses on the behaviour of national level aggregate such as national income, total output, employment level, price level, etc. Macroeconomics is also called aggregative economics.
11.
( )
Macroeconomics is the branch of economics that studies the behaviour of factors affecting the economy as a whole. It focuses on the behaviour of national level aggregate such as national income, total output, employment level, price level, etc. Macroeconomics is also called aggregative economics.
12.
( )
The name of the Keynesian book published in 1936 is 'The General Theory of Employment, Interest and Money'.
13.
( )
modern
14.
( )
investment
15.
( )
large
16.
( )
small
17.
( )
Adam Smith
18.
( )
scarcity
19.
(d)
Macroeconomics
20.
(c)
1936
21.
(c)
The General Theory of Employment, Interest and Money
22.
(b)
Yes
23.
(c)
Both of these
24.
(b)
Microeconomics
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