Please read and answer the following question Which of the following questions d

ID: 1142689 • Letter: P

Question

Please read and answer the following question

Which of the following questions do you think would be studied by a macroeconomist and which by a microeconomist?

A. What should the European Central Bank do about increasing prices in Europe?

B. What happens to the price of ice cream in the summer?

C. Should you take out a student loan to pay for college?

D. What happens when the US government cuts taxes and pays for these tax cuts by borrowing money?

E. What would happen to the prices of computers if Apple and Microsoft merged into a single firm?

More than 320 million people in 16 European countries share the euro as their currency. The Governing

Council of the European Central Bank (ECB) is responsible for the single monetary policy in these

countries, which are known collectively as the euro area. The Eurosystem, comprising the ECB and the

national central banks (NCBs) of the euro area countries, has a clear mandate assigned by the Treaty

establishing the European Community: its primary objective is to maintain price stability in the euro area.

In other words, the Governing Council of the ECB is mandated to preserve the purchasing power of the

euro. This mandate reflects a broad consensus in society that, by maintaining price stability, monetary

policy contributes significantly to sustainable growth, economic welfare and job creation.

The Eurosystem has been granted independence in order to carry out its mandate. Furthermore, the

Governing Council has selected and made public its monetary policy strategy to deliver price stability, and

uses an efficient and well-functioning operational framework in order to conduct its single monetary policy.

In short, the Eurosystem has all the tools and skills needed to conduct a successful monetary policy

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