The Basic Difference Between Macroeconomics and Microeconomics Is That

question 180

Multiple Choice

The basic difference between macroeconomics and microeconomics is that

• A) macroeconomics looks at how people make choices, and microeconomics looks at why they make those choices.
• B) macroeconomics is concerned with economic policy, and microeconomics is concerned with economic theory.
• C) macroeconomics focuses on the aggregate economy, and microeconomics focuses on small components of that economy.
• D) macroeconomics is associated with the fallacy of composition, and microeconomics has little to do with the fallacy of composition.

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Definitions:

Accounting Cycle

The collective process of recording and processing all financial transactions of a company, from when the transaction occurs, to its representation on financial statements, followed by closure of accounts.

Working Capital

The excess of the current assets of a business over its current liabilities.

Solvency

The ability of a firm to pay its debts as they come due.

Current Ratio

A financial ratio that is computed by dividing current assets by current liabilities.