1.8 Macroeconomic Issues

• What are macroeconomic issues?

  Broad economic problems
• What is inflation in macroeconomic terms?

  Increase in prices
• How do macroeconomic issues differ from microeconomic issues?

  Affect overall economy
• Inflation is measured using the Consumer Price Index, also known as CPI
• Fiscal policy involves government spending and taxation decisions.
• Monetary policy influences economic activity by adjusting interest rates and controlling the money supply.


  True
• Unemployment refers to the number of people who are jobless and actively seeking employment.


  True
• Match the macroeconomic issue with its key indicator:

  Economic Growth ↔️ GDP growth rate

  Unemployment ↔️ Unemployment rate

  Inflation ↔️ Consumer Price Index (CPI)

  Trade Deficits/Surpluses ↔️ Net exports
• What does the unemployment rate measure?

  Jobless people seeking work
• What are the two major types of policy responses to macroeconomic issues?

  Fiscal and monetary policy
• Macroeconomic issues include the expansion or contraction of the total output of an economy, which is called economic growth
• Trade deficits occur when a country's imports exceed its exports
• Macroeconomic issues are studied by macroeconomists, while microeconomic issues are studied by microeconomists.

  True
• Trade surpluses can boost economic growth by bringing more money into the country.


  True
• Who manages monetary policy?

  Central banks