Question

State the following statements are true or false.
1) Macro-Economics is known as income analysis.
2) Increase in national income is a Micro- Economic goal.
3) Macro-Economic adopts lumping method.
4) Study of price determination is a subject matter of Macro-Economics.
5) Micro-Economics deals with the study of aggregates.
6) National output is an example of macro variable.

Answer 1

1) True
Explanation:
The above statement is correct. Macroeconomics is also known as the ‘Theory of Income and Employment’, or income analysis, as it focuses on how income and employment levels are determined in an economy.

2) False
Explanation:
The above statement is incorrect. An increase in the national income is a macroeconomic goal. Besides this, macroeconomics focuses on aggregate measures such as aggregate demand, aggregate supply and aggregate price level and confronts major problems such as poverty, unemployment, inflation and BOP disequilibrium.

3) True
Explanation:
Yes. Macroeconomics adopts the lumping method. It splits the entire economy into big lumps; that is, it divides the economy into aggregates for study. It studies how an economy operates as a whole. It focuses on aggregate measures such as aggregate demand, aggregate supply and aggregate price level and studies how these variables are determined and how they change over time.

4) False
Explanation:
The statement is incorrect, as price determination is the subject matter of microeconomics. Microeconomics studies how prices are determined in both the commodity and factor markets based on the demand and supply analysis.

5) False
Explanation:
The above statement is not true. Macroeconomics is the study of aggregates. It studies how an economy operates as a whole. It focuses on aggregate measures such as aggregate demand, aggregate supply and aggregate price level. It also studies how these variables are determined and how they change over time.

6) True
Explanation:
The above statement is correct. This is because national output is an aggregate of all outputs produced within an economy during a year. Hence, it is a macroeconomic variable.