Which of the following best describes the two primary topics studied by macroeconomics?

• A. Supply and demand in individual markets
• B. Economic growth and unemployment
• C. Consumer choice and firm production
• D. Aggregate output and overall price level

Answer: (D)

Verified step by step guidance

1. Step 1: Understand that macroeconomics studies the economy as a whole, focusing on broad aggregates rather than individual markets or firms.
2. Step 2: Recognize that key topics in macroeconomics include measuring total economic activity, often called aggregate output, which is the total production of goods and services in an economy.
3. Step 3: Identify that another primary focus is the overall price level, which reflects the average prices of goods and services and is important for understanding inflation and purchasing power.
4. Step 4: Differentiate these macroeconomic topics from microeconomic topics such as supply and demand in individual markets or consumer choice, which focus on smaller economic units.
5. Step 5: Conclude that the two primary topics studied by macroeconomics are aggregate output and the overall price level, as these capture the big-picture performance and health of the economy.