Which of the following best describes what macroeconomics focuses on understanding?

• A. The production costs of a specific product
• B. The overall performance and behavior of an economy, including inflation, unemployment, and economic growth
• C. The pricing strategies of a single company in a competitive market
• D. The decision-making processes of individual consumers and firms

Answer: (B)

Verified step by step guidance

1. Step 1: Understand that macroeconomics is the branch of economics that studies the economy as a whole, rather than individual markets or products.
2. Step 2: Recognize that macroeconomics focuses on aggregate indicators such as inflation, unemployment, and economic growth, which reflect the overall performance and behavior of an economy.
3. Step 3: Differentiate macroeconomics from microeconomics, which deals with individual consumers, firms, and specific products or markets.
4. Step 4: Identify that topics like production costs of a specific product or pricing strategies of a single company fall under microeconomics, not macroeconomics.
5. Step 5: Conclude that the best description of macroeconomics is its focus on the overall economy, including broad phenomena like inflation, unemployment, and economic growth.