Download Chapter 3 Section 2 Assessment

Chapter 3 Section 2 Assessment
1) Compare macroeconomics with microeconomics, and give an example of each.
Macroeconomics is the study of the economy as a whole vs. microeconomics as the study of the
economy as a smaller unit. Macroecon includes paying attention to the S&P 500, which represents
multiple corporations and is commonly used as a measure of the U.S. market, or analyzing the U.S.’
Gross Domestic Product. In contrast, microecon includes paying attention to a particular stock or
budgeting a household income.
2) How does gross domestic product (GDP) provide a means to analyze economic growth?
By showing the total value of all final goods and services for the year, which can be then compared to
the GDP of previous years.
3) What does GDP tell economists about business cycles?
GDP records, compared against each other chronologically, will illustrate a trend. Depending on whether
the trend is increasing or decreasing, economists will know at what stage of a business cycle the country
is in.
4) Give one example of a new technology that has resulted in greater productivity for the United
States.
The development of faster and battery-efficient laptops with greater storage capacity increases
productivity of individuals with this technology. In turn, those individuals increase the productivity of
their workplace, which then improves the economy.
5) a. How do patents and copyrights promote innovation?
These laws ensure that no one can duplicate a product that has already been invented. So, in order to
compete with the already-invented product, competitors must develop a better, more innovative
product.
b. How does innovation help the economy?
Innovation creates competition and competition results in better, sometimes cheaper products for the
consumers.
6) Describe and analyze how economic stability is measured.
The general price levels are indicators of economic stability. General prices indicate if consumers are
paying more than the average or if businesses are selling for less than their products are worth.
7) Are the macroeconomic goals of employment, growth, and stability best met by the public sector or
by the private sector? Explain.
Macroeconomic goals are best met by the public sector, specifically the government, because the public
sector is more centrally controlled and easily influenced.
8) Explain how scientific discoveries and technological innovations create the need for rules and
regulations to protect individuals and businesses.
Scientific discoveries and innovations create competition. Like a referee in a sports match, rules and
regulations are needed to insure that competitions remain fair and ethical.