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Author Question: Which of the following are primarily macroeconomic topics and which are primarily microeconomic ... (Read 102 times)

olgavictoria

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on: Jun 29, 2018
Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics?
 
  a. college tuition rates
  b. farm subsidies
  c. national income
  d. automobile prices
  e. air traffic congestion
  f. economic recession

Question 2

Why might fiscal stimulus crowd out investment?
 
  What will be an ideal response?


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SomethingSomething

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Reply #1 on: Jun 29, 2018
Answer to Question 1

c and f are primarily macroeconomic topics.
a, b, d, and e are primarily microeconomic topics.

Answer to Question 2

Fiscal stimulus, such as an increase in government expenditure or a decrease in taxes, increases the budget deficit. The increase in the budget deficit increases the (government's) demand for loanable funds, thereby raising the real interest. The higher real interest rate decreasescrowds outinvestment.


olgavictoria

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

strudel15

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Reply 3 on: Yesterday
Excellent

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