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5 Macroeconomics is best described as the study of:
a) very large issues;
b) the choices made by individual households, firms, and governments;
c) the nations economy as a whole;
d) the relationship between inflation and wage inequality.

6 Which of the following is a microeconomics question?
a) Is it sensible for a government to subsidize tobacco production?
b) Why do some countries grow faster than others?
c) Should Congress and the president take action to reduce global warming?
d) Should the government attempt to influence the interest rate to lower
inflation?

Answer the following questions.
1 What is scarcity? Can you think of two causes of scarcity?
2 How is Economics defined?
3 What are three reasons to study economics?
4 What is the difference between microeconomics and macroeconomics?
5 What are examples of individual economic agents?
6 What are the main goals of macroeconomics?
7 How is economic model defined?

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