Test Questions for Checking Your Knowledge What is the difference between macroe

Question

Test Questions for Checking Your Knowledge
What is the difference between macroeconomics and microeconomics?
How would you define managerial economics?
What are the roles of money?
What is the difference on the view on value from classical, neoclassical, and behavioral economics?
Please describe the concept of circulation of money in economy.
What is the difference between accounting and economics approaches in assessing profit?
You invested some amount of money. Is it your expense?
In all answers provide definitions, elaborate on the concept and provide examples. Feel free to make up the entire example and all data for your examples

Explanation / Answer

1. Macroecomics deals with the larger economic aspects like GDP, Interest rates unemployment level, exports, imports, currency valuation. Example GDP of USA is 19390.62 Billion in 2017
Microeconomics deals with the individual firm level which basically deals with the output, input, cost, price, profit, Example: Price of a car, pen cellphone etc
2. Application and utilization of economic theory to solve the practical issues of a business.
3. Roles are medium of exchange value, store of value, measure of value, unit of account, basis of credit and standard of payment
4. Classical Economics: It deals with the macroeconomic level of expansion and contraction of economy
NeoClassical Economics: It deals with the microeconomic level on how individuals operate on with in an economy
Behavioral economics: It deals with consumer psychological insights in making decision towards purchase
5. Money serves function of exchange of goods through payments. Firms hire labour from households paying them wages whereas the households buy finished goods from firms using money.
6. Accounting profit includes only cash payments and higher than economic profit
Economic profit includes monetary costs and opportunity costs a firm pays
7. Investment is not an expense as it would earn returns

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