IAI Actuarial Core Principles · Business Economics · Relationship between economics and business
Which question falls within macroeconomics rather than microeconomics, as it affects an Indian bank?
The question about an economy-wide repo rate rise affecting aggregate investment and inflation is macroeconomic because it deals with economy-wide totals. The other options focus on individual firms or households making decisions, which belongs to microeconomics.
- AHow does a single bank's loan pricing respond to a rival's rate cut?
- BHow does a household choose between a fixed deposit and mutual funds?
- CHow does an economy-wide rise in the repo rate alter aggregate investment and inflation, and hence the bank's loan demand?Correct
- DHow many tellers should a branch employ to minimise cost?
- How does a monopolist set the price of a credit card?
Explanation
Macroeconomics studies aggregates such as inflation, output and interest rates across the whole economy. The other options concern decisions of individual firms or households, which is microeconomics.
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