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11 May, 03:56

Suppose that the stock market rises significantly over the next year, making investors wealthier and more optimistic about the economy while raising the overall level of consumption. Is this increase in consumer confidence a microeconomic or a macroeconomic issue?

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  1. 11 May, 04:16
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    Macroeconomic issue

    Explanation:

    Macroeconomics deals with the behaviours of the economy as a whole that means it analyses the market at an aggregate level. A change in stock market prices will affect some investors, this is a microeconomics issue. If that change affects the overall consumption in the economy then that is a macroeconomic issue, because it will have aggregate effects and it will affect the whole population, not some investors.
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