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Unformatted text preview: cs studies their behavior and choices individually It also studies the interactions between these 3 groups Macroeconomics 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)? Micro 14 15 ASSUMPTIONS, THEORIES AND MODELS Assumptions: ser...
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