Which of the following is NOT within the scope of macroeconomics?
Show answer & explanation
Correct answer: C
Explanation
Answer: (C) Salary of an establishment
Explanation:
Economics is primarily divided into two branches: Microeconomics and Macroeconomics. Under Macroeconomics, economic issues are studied at the level of the entire economy such as national income, aggregate investment, aggregate consumption, inflation, and unemployment. In contrast, Microeconomics studies the behavior of individual units, such as a single consumer, a household, or a specific establishment/company. Since "the salary of an establishment" relates to an individual unit or a specific firm, it falls under the scope of Microeconomics, not Macroeconomics.
Additional Points:
National Income: This represents the total value of all goods and services produced within a country's borders, serving as a key component of Macroeconomics.
Aggregate Investment: This indicates the total rate of capital formation within the economy.
Aggregate Consumption: This represents the total expenditure incurred on consumption by all households in the country.
John Maynard Keynes is recognized as the father of Macroeconomics.
Potential Exam Questions and Answers:
Question: Who first coined the term "Macroeconomics"?
Answer: Ragnar Frisch, in 1933.
Question: Who is the author of the book The General Theory of Employment, Interest and Money?
Answer: J.M. Keynes.