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Scope of Economics
ANSWERS TO TEXTBOOK EXERCISES

Multiple Choice Questions

(1 Mark)

Choose the correct alternative in the following questions.

1. Microeconomics deals with economic behaviour of :

(a) Economic System

(b) Economic entities that make up the system

(c) Country
(d) Regions of a country
Ans. (b) Economic entities that make up the system
2. Macroeconomics deals with economic functions of :

(a) Central bank
(b) Government

(c) Policy Commission
(d) All the above
Ans. (d) All the above
3. Microeconomics is study of :

(a) A producer

(c) An industry
Ans. (d) All the above

(b) Production of a good

(d) All the above

4. Macroeconomics is study of :

(a) Consumption behaviour of all members of a family.

(b) Sum of all consumers of a product.

(c) Sum of all consumers of all products.

(d) All the above
Ans. (c) Sum of all consumers of all products.
5. Which is macroeconomic variable?

(a) Unemployment
(b) Inflation

(c) Income inequalities
(d) All the above
Ans. (d) All the above

GOYAL BROTHERS PRAKASHAN

Core Economics with Video Lectures for ClassXII

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 6. Macroeconomics generalises :

(a) How economic decisions are taken?

(b) How economic decisions are taken by people?

(c) How economic decisions are taken by the industry?

(d) How economic decisions are taken by government?
Ans. (b) How economic decisions are taken by people?
7. Which one is microeconomic variable?

(a) Foreign exchange
(b) Balance of payments

(c) Exports and imports of a country (d) None of the above
Ans. (c) Exports and imports of a country
8. Macroeconomics deals with :

(a) Pricing of a product

(c) General price level
Ans. (d) None of the above

(HOTS)

(b) Pricing of a factor of production

(d) None of the above

Short Answer Questions

(3 Marks)

Answer the following questions in about 60 words.

1. Distinguish between microeconomics and macroeconomics with an example
of each.
Microeconomics
Macroeconomics
Ans.
(a) I t is the study of individual economic
units of an economy.
(b) Its central problem is price determination
and allocation of resources.
(c) It deals with individual income,
individual prices and individual output
etc.

It is the study of economy as a

whole and its aggregates.
Its central problem is determination
of level of income and employment.
It deals with aggregates like
national income, general price level
and national output etc.

2. Explain the relation between microeconomics and macroeconomics.

Ans. Both microeconomics and macroeconomics are simply two ways of looking
at the same thing. It is because the behaviour of the economy as a whole
is dependent on the behaviour of the units that make it up. For example,
aggregate demand of the economy is the sum total of demand of all individual
units that make the economy. Similarly, national income is the sum total of
income of all the residents of the economy.

GOYAL BROTHERS PRAKASHAN

Core Economics with Video Lectures for ClassXII

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 3. Giving reason and identify which of the following are the subject matter of
microeconomics or of macroeconomics :
(HOTS)
Ans. (i) National income Macroeconomics as it deals with the income of the
whole nation.
(ii)
Supply by an industry Microeconomics as it deals with individual
economic unit.
(iii)
Government budget Macroeconomics as it is related to the budget for
the nation.
(iv)
Supply by a firm Microeconomics dealing with individual economic
units.
CBSE Examination Questions
1. Define micro-economics.
Ans. Microeconomics is that part of economic theory which deals with behaviour
of individual units of an economy such as a household, a firm etc.
2. Define macro-economics.
Ans. Macroeconomics studies the economy in its totality as a whole.
3. Give two examples of microeconomics.
Ans. Examples Individual income, consumers equilibrium.
4. Give two examples of macroeconomics.
Ans. Examples National income, unemployment.
Value Based Questions
1. Which branch of economics studies aspects concerning people of the country
as a whole?
Ans. Macroeconomics
2. Inflation hits the common man the most. Which branch of economics tries
to find solution of this problem?
Ans. Macroeconomics
3. Which branch of economics deals with the problem of unemployment, a
curse for the society?
Ans. Macroeconomics

GOYAL BROTHERS PRAKASHAN

Core Economics with Video Lectures for ClassXII

Copyright GBP-Copy in any form is Prohibited.