5. Classify the following topics as relating to microeconomics or macroeconomics. a. a family’s decision about how much income to save: Microecomics because it is about one family, at individual level b. the effect of government regulations on auto emissions: Microeconomics because it only affects inndividuals and industries that have to deal with auto emissions c. the impact of higher national saving on economic growth: Macroeconomics because it affects the aggregate demand of a country d. a firm’s decision about how many workers to hire: Microeconomics beacause it is about a particular firm e. the relationship between the inflation rate and changes in the quantity of money: Macroeconomics because it affects the money system of a country as a whole 6. Classify each of the following statements as positive or normative. Explain. a. Society faces a short-run trade-off between inflation and unemployment: This is a positive statement because there is a fact that inflation and unemployment rate have a negative relationship and in an economy, we usually face trade-off between them. b. A reduction in the rate of money growth will reduce the rate of inflation: This is a positive statement because a simultaneous reduction in money growth and inflation rate is a fact c. The Federal Reserve should reduce the rate of money growth: This is a normative statement because it is an opinion, not a fact d. Society ought to require welfare recipients to look for jobs: This is a normative statement because it is an opinion about how the society should be e. Lower tax rates encourage more work and more saving: This is a positive statement because it is true that lower tax rates will result in higher employment and saving.