Which of the following is not a macroeconomic aggregate?
Show answer & explanation
Correct answer: D
Explanation
Solution: The correct answer is Market supply of rice.
Explanation:
☛ Macroeconomics studies the economy as a whole and deals with broad economic aggregates such as total output, national income, and aggregate employment.
☛ Market supply of rice is a microeconomic variable because it refers to the supply of a single commodity within an individual market rather than the entire economy.
☛ Aggregate demand (AD): It represents the total demand for all finished goods and services produced in an economy over a specific period, making it a key macroeconomic aggregate.
☛ Gross Domestic Product (GDP): It measures the total monetary value of all final goods and services produced within a country's borders, which is a core macroeconomic indicator.
☛ Price level: The general price level reflects the average prices of a basket of goods and services in the entire economy (measured through indices like CPI or WPI), hence it is a macroeconomic aggregate.
Extra Exam-Relevant Facts:
☛ The terms 'Microeconomics' and 'Macroeconomics' were first coined by Norwegian economist Ragnar Frisch in 1933.
☛ John Maynard Keynes is widely regarded as the founding father of modern macroeconomics, largely due to his 1936 book 'The General Theory of Employment, Interest and Money'.
☛ Microeconomics: Focuses on individual decision-making units, such as a household, a firm, or the market for a single good.
☛ Macroeconomic indicators: Commonly include inflation rate, unemployment rate, national income, balance of payments, and fiscal deficit.
Important One-Liners for Upcoming Exams:
☛ Who is known as the father of modern macroeconomics? → John Maynard Keynes
☛ Who coined the terms 'Microeconomics' and 'Macroeconomics'? → Ragnar Frisch (1933)
☛ Which economic theory focuses on price determination in individual product markets? → Microeconomic Theory (Price Theory)
☛ What term defines the total planned expenditure in an economy? → Aggregate Demand
☛ What is the study of inflation, national output, and unemployment known as? → Macroeconomics