II. Choose the correct alternative to complete each sentence.

1. The study and analysis of the economics as a whole is………………… .

a) microeconomics b) macroeconomics c) economics

2. Goods that are bought and used by the public, rather than being used for manufacturing further goods are called…………… .

a) duty-free goods b) consumer goods c) low-price goods

3. An analysis and classification of something (for example costs) into component parts is……………. .

a) partial analysis b) theory c) breakdown

4. An analysis that ignores indirectly induced effects is said to be ……………… .

a) partial analysis b) a manageable analysis c) a complete pattern

5. A hypothetical state of balance in all the markets which make up an economy (supply and demand of goods, labour, capital, etc. ) is…………. .

a) balance of trade b) general equilibrium c) market

6. General equilibrium theory studies…………………… .

a) the economy as a whole b) every market for every commodity c) a single bundle called “consumer goods”

7. The total value of goods produced (or services performed by a person, a company, an industry, or a whole country) is………

a) output b) input c) volume

III. Fill in the spaces with the words below:

a detailed analysis, neglect, interactions, building blocks, issues.

Microeconomics offers ……… ……… of particular activities in the economy. For simplicity, it may …………. some interactions with the rest of the economy. Macroeconomics emphasizes these …………. at the cost of simplifying the individual…………. …………. . Inflation, unemployment, and growth are the three of the most important macroeconomic……….. .

IV. Read the text below. Choose the best alternative from the box to fill in each of the gaps.

1. The distinction between microeconomics and macroeconomics is more than the difference between economics in the small and economics in the large,………………………. .

2. Microeconomics and macroeconomics take different approaches ………..

3. Microeconomics places the emphasis on a detailed understanding of particular markets. To achieve this amount of detail or magnification, …… .

4. Because macroeconomics is concerned primarily with the interaction of different parts of the economy, ………….. .

5.Macroeconomics simplifies the building block in order to…………… .

6. Macroeconomics is concerned with broad aggregates ………. .

a) many of the interactions with other markets are suppressed

b) such as the total demand for goods by households or the total spending on machinery and building by firms

c) to keep the analysis manageable

d) which the Greek prefixes micro and macro suggest

e) focus on how they fit together and influence one another

f) it relies on a different simplification to keep the analysis manageable

V. Which of the following statements are the concern of microeconomics and which of macroeconomics?

a) Along with other Western economies, the UK faced a sharp rise in the unemployment rate in the early 1980s.

b) The imposition of higher taxes on tobacco will discourage smoking.

c) Unemployment among building labourers rose sharply in the early 1980s.

d) An increase in a society’s aggregate income is likely to be reflected in higher consumer spending.

e) A worker who has received a pay rise is likely to buy more luxury goods.

f) A firm will invest in a machine if the expected rate of return is sufficiently high.

g) High interest rates in an economy may be expected to discourage aggregate investment.

h) The level of gross national product in the UK is higher this year than in 1990.