Which of the following is an example of a macroeconomic question?

• A. What causes the overall unemployment rate to rise in a country?
• B. What determines the price of smartphones in a specific city?
• C. How does a local bakery decide how many loaves of bread to bake each day?
• D. How does a single firm maximize its profits?

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the difference between microeconomics and macroeconomics. Microeconomics focuses on individual agents like households and firms, while macroeconomics looks at the economy as a whole, including aggregate variables such as total unemployment, inflation, and GDP.
2. Step 2: Analyze each question to determine its scope. For example, questions about a single firm or a specific product market are microeconomic because they deal with individual decision-making.
3. Step 3: Identify the question that deals with aggregate economic variables affecting the entire economy. In this case, the question about the overall unemployment rate rising in a country is macroeconomic because it concerns a broad economic indicator.
4. Step 4: Recognize that questions about prices in a specific city, decisions of a local bakery, or profit maximization of a single firm are microeconomic topics since they focus on individual markets or firms.
5. Step 5: Conclude that the question 'What causes the overall unemployment rate to rise in a country?' is an example of a macroeconomic question because it addresses an economy-wide issue.