(a)
The branch of economics represented by the headline "US
Answer to Problem 4P
The branch of economics represented by the headline "US unemployment rate reaches historic high" is
Explanation of Solution
Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand,
Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision.
Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.
(b)
The branch of economics represented by the headline "General Motors Closes Auto Plant in Wisconsin".
Answer to Problem 4P
The branch of economics represented by the headline "General Motors Closes Auto Plant in Wisconsin" is microeconomics.
Explanation of Solution
Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc. General Motors is an individual company whose one of the plants is shut down. This is a microeconomic decision by a micro unit General Motors. Thus, the branch of economics represented by the headline "General Motors Closes Auto Plant in Wisconsin" is microeconomics.
Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.
Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.
(c)
The branch of economics represented by the headline "OPEC Action Results in a General Increase in Prices".
Answer to Problem 4P
The branch of economics represented by the headline "OPEC Action Results in a General Increase in Prices" is macroeconomics.
Explanation of Solution
Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc. An OPEC decision leading to increase in general level of prices would be a macroeconomic phenomenon since general price level is a macroeconomic variable. Hence, the branch of economics represented by the headline "OPEC Action Results in a General Increase in Prices" is macroeconomics.
Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.
Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.
(d)
The branch of economics represented by the headline "The Cost of Healthcare Rises for Employees".
Answer to Problem 4P
The branch of economics represented by the headline "The Cost of Healthcare Rises for Employees" is macroeconomics.
Explanation of Solution
Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.The rise in the cost of healthcare is a macroeconomic concept since the healthcare is now costly for the economy as a whole.Therefore, the branch of economics represented by the headline "The Cost of Healthcare Rises for Employees" is macroeconomics.
Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.
Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.
(e)
The branch of economics represented by the headline "Lawmakers Worry About the Possibility of a US Recession".
Answer to Problem 4P
The branch of economics represented by the headline "Lawmakers Worry About the Possibility of a US Recession" is macroeconomics.
Explanation of Solution
Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.Recession refers to the slowing down of economic activity characterized by falling output, prices and employment. Therefore, an issue of a possible recession would represent macroeconomic situation. Thus, the branch of economics represented by the headline "Lawmakers Worry About the Possibility of a US Recession" is macroeconomics.
Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.
Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.
Recession: Recession refers to the slowing down of economic activity characterized by falling output, prices and employment. A recession is preceded by boom and followed by recovery. It is a part of the business cycle: Boom ( Recession( Recovery( Boom.
(f)
The branch of economics represented by the headline "Los Angeles Dodgers Make Pitcher Highest Paid Ballplayer".
Answer to Problem 4P
The branch of economics represented by the headline "Los Angeles Dodgers Make Pitcher Highest Paid Ballplayer" is macroeconomics.
Explanation of Solution
Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc. If Pitcher is declared the highest paid ballplayer, it is a national level title given to him. Thus, the branch of economics represented by the headline "Los Angeles Dodgers Make Pitcher Highest Paid Ballplayer" is macroeconomics.
Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.
Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.
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Chapter 1 Solutions
EXPLORING ECON.-W/ACCESS (LL) >CUSTOM<
- Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all. Write explanation in paragraphs and if you use currency use USD currency: 10. What is the mechanism or process that allows the expenditure multiplier to “work” in theKeynesian Cross Model? Explain and show both mathematically and graphically. What isthe underpinning assumption for the process to transpire?arrow_forwardUse the Feynman technique throughout. Assume that you’reexplaining the answer to someone who doesn’t know the topic at all. Write it all in paragraphs: 2. Give an overview of the equation of exchange (EoE) as used by Classical Theory. Now,carefully explain each variable in the EoE. What is meant by the “quantity theory of money”and how is it different from or the same as the equation of exchange?arrow_forwardZbsbwhjw8272:shbwhahwh Zbsbwhjw8272:shbwhahwh Zbsbwhjw8272:shbwhahwhZbsbwhjw8272:shbwhahwhZbsbwhjw8272:shbwhahwharrow_forward
- Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all:arrow_forwardUse the Feynman technique throughout. Assume that you’reexplaining the answer to someone who doesn’t know the topic at all: 4. Draw a Keynesian AD curve in P – Y space and list the shift factors that will shift theKeynesian AD curve upward and to the right. Draw a separate Classical AD curve in P – Yspace and list the shift factors that will shift the Classical AD curve upward and to the right.arrow_forwardUse the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all: 10. What is the mechanism or process that allows the expenditure multiplier to “work” in theKeynesian Cross Model? Explain and show both mathematically and graphically. What isthe underpinning assumption for the process to transpire?arrow_forward
- Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all: 15. How is the Keynesian expenditure multiplier implicit in the Keynesian version of the AD/ASmodel? Explain and show mathematically. (note: this is a tough one)arrow_forwardUse the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all: 13. What would happen to the net exports function in Europe and the US respectively if thedemand for dollars rises worldwide? Explain why.arrow_forward20. Given the mathematical model below, solve for the expenditure multiplier for a) government spending, G; and b) for consumer taxes, T. (medium difficulty) Y=C+I+G C=Co+b(Y-T) 1 = 10 T=To+tY G = Go+gYarrow_forward
- Use the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all: 11. What exactly is a rectangular hyperbola and what relevance is it to classical economics?arrow_forwardUse the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all: 9. Explain the difference between absolute and comparative advantage in a family setting, i.e.using parents and children. What can we glean from knowing about comparative andabsolute advantages?arrow_forwardUse the Feynman technique throughout. Assume that you’re explaining the answer to someone who doesn’t know the topic at all: 18. Explain why most economists believe it is absolutely necessary to allow free trade in aneconomy. Why is it harmful (under most circumstances) to have tariffs and trade barriers?arrow_forward
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning