Assignment 1.1 – Micro and Macro Relationship and Effects

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1.How does microeconomics relate to macroeconomics?

2.Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers.
*The number of people at the most common ages for home-buying increases.
*People gain confidence that the economy is growing and that their jobs are secure.
*Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
*Because of a threat of war, people become uncertain about their economic future.
*The overall level of saving in the economy diminishes.
*The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.

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