Which of the Following Does Macroeconomics NOT Endeavor to Answer

question 15

Multiple Choice

Which of the following does macroeconomics NOT endeavor to answer?
i. Why is the typical person in the United States today more than 10 times richer than the typical person a century ago?
ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years?
iii. Why has the price of orange juice risen sharply?

• A) ii and iii
• B) i only
• C) ii only
• D) i, ii, and iii
• E) iii only

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Definitions:

Time Value

The principle that current money has a higher value than the same amount would in the future, given its potential to earn more.

Money

A medium of exchange that is widely accepted in transactions for goods and services, acting as a unit of account, a store of value, and sometimes, a standard of deferred payment.

Compounding

A method in which an investment's worth grows over time as the returns, including both capital gains and interest, accumulate interest.

Compound Interest

The practice of charging interest on the principle amount along with the interest that has been piled up from past periods, relevant to both lending and saving scenarios.