Economics 0455 · IGCSE · Microeconomics and macroeconomics
Microeconomics and macroeconomics — practice question
South America is a vast geographical region containing millions of microeconomic decision-makers. In a recent pandemic, schools remained shut for longer than in any other part of the world. Consequently, students obtained less education. The World Bank estimated that the average student would earn $24000 less over their lifetime. Some students may earn only the minimum wage. In 2020, South America recorded an inflation rate of 6.3% and an economic growth rate of only 1.8%.
(a)[2]
Identify how microeconomics is different from macroeconomics.
(b)[4]
Explain in what way less education can lower a person’s lifetime earnings.
(c)[6]
Analyse the effect that introducing a minimum wage could have on unemployment.
(d)[8]
Discuss whether a high inflation rate in an economy is likely to be linked with a low economic growth rate.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Microeconomics focuses on individual markets/decisions” …