Current macroeconomic models use microeconomic principles because
A) they use the same language for all economists.
B) they highlight the sociological aspects of production.
C) the behavior of economic agents changes with policy.
D) we live in a democratic society and everybody has a say.

Question

Quizplus · Accepted Answer

Macro-level economic phenomena, such as inflation and economic growth, are influenced by the individual actions of economic agents, such as households and firms. As a result, macroeconomic models incorporate microeconomic principles to understand and analyze these aggregate economic outcomes. The behavior of these agents is often influenced by policy, which further strengthens the need to incorporate microeconomic principles in macroeconomic models. A, B, and D are irrelevant to the reason why microeconomic principles are used in macroeconomic models.

Current Macroeconomic Models Use Microeconomic Principles Because