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studies their behavior
It also studies the
between these 3
13 Level of Production Standard of Living How can we measure an entire country’s
total level of production?
How is this level of production related to
income? To unemployment? What affects a country’s standard of living – the
average level of consumption of goods/services
enjoyed by the population? Cost of Living What is the “cost of living” and how is it
measured? Micro or Macro? How will a drought in the Midwest affect the market (price and output) of corn?
Micro How will the Fed’s increase of short-term interest rates affect the country’s savings rate?
Macro How will uncertainty in the Middle East affect the price of crude oil (and gasoline)?
14 15 ASSUMPTIONS, THEORIES
AND MODELS Assumptions: ser...
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- Spring '07