ECS2602 ASSIGNMENT 1 SEMESTER 2 AUGUST 2023 2 1. Which of the following statements are correct? a. Macroeconomics studies the determination of the level of output and income for a specific firm. b. In macroeconomics we focus on the interac

ECS2602 ASSIGNMENT 1 SEMESTER 2 AUGUST 2023 2 1. Which of the following statements are correct? a. Macroeconomics studies the determination of the level of output and income for a specific firm. b. In macroeconomics we focus on the interaction between different markets, such as the goods market, the financial market, the labour market and the foreign exchange market. c. Real GDP per capita is widely used as a measure of economic welfare or wellbeing of the residents of a country. d. The main instrument of fiscal policy is the budget, while the main policy variable is the interest rate. e. A contractionary monetary policy implies a decrease in government spending and an increase in taxation. 1. a, b and c 2. b, c and d 3. b, d and e 4. Only b and c 5. b, c and e Explanation: The correct option is 4. Statement a is incorrect. Macroeconomics deals with the economy as a whole and not a specific firm. Statement b is correct. That is what we will be studying in this module. Statement c is correct. Statement d is incorrect. The policy variables are government spending and taxation. Statement e is incorrect. The contractionary monetary policy implies a decrease in the money supply and therefor