Quiz 1: Introduction

Business

Microeconomics and macroeconomics differ in the economic unit on which they focus.Microeconomics focuses on the individual economic agent,i.e.,the consumer or the firm.Whereas macroeconomics considers the economy as a whole.There is a close link between the two branches,however,because many macroeconomic relationships are based on aggregate versions of the behavioral relationships derived on the microeconomic level.

Trend inflation rose steadily in the 1950s and 1960s,then rose dramatically during the 1970s.Beginning in the early 1980s,inflation fell precipitously until 1987,then has remained relatively constant around 2% since.

Real Gross Domestic product measures total output in the U.S.adjusted for changes in the price level.The easiest way to calculate a real statistic is to use a constant set of prices across every year.