Economics 2281 · O Level · Microeconomics and macroeconomics
Microeconomics and macroeconomics — practice question
South America covers a very extensive geographical region and includes millions of microeconomic decision-makers. During a recent pandemic, schools remained shut for longer than anywhere else in the world. Consequently, students obtained less education. The World Bank estimated that the average student would earn $\$24\,000$ less across their lifetime. Some students may receive 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 differs from macroeconomics.
(b)[4]
Explain how less education can lower a person’s lifetime earnings.
(c)[6]
Analyse how the introduction of a minimum wage could influence unemployment.
(d)[8]
Discuss whether an economy with a high inflation rate will necessarily have a low economic growth rate.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme.