Macroeconomics often relies on microeconomic analysis because
A) microeconomics is older than macroeconomics.
B) microeconomic theory can be tested and macroeconomic theory cannot be tested.
C) all aggregates are made up of individuals and firms.
D) the effects of macroeconomic subjects such as inflation and unemployment are independent of individual consumers and firms.

Question

Quizplus · Accepted Answer

Macroeconomic aggregates, such as GDP, inflation, and unemployment, are composed of individual decisions made by households and firms. Therefore, understanding individual behavior through microeconomic analysis is essential to understanding the overall performance of the macroeconomy.

Macroeconomics Often Relies on Microeconomic Analysis Because