Question

When we study macroeconomics:

	A.	we model tens of thousands of individual supply and demand curves.
	B.	we determine thousands of prices and quantities.
	C.	we employ aggregation to reduce the number of markets we need to understand.
	D.	we add up all the demand and supply curves that are obtained in microeconomics.
	E.	we add up the prices of all goods and services produced in the economy.

Answer 1

E. When we add the prices of all goods and services produced in the economy.

Macroeconomics is studying the economy as a whole. When we add the prices of all the goods and services produced in an economy, we find the product of the economy with which we can make macroeconomic policies and find out how the economy is working.