Which of the following headlines is more closely related to what microeconomists study than to what macroeconomists study?
a. Unemployment rate falls from 7.5 percent to 7.3 percent.
b. Real GDP falls by 0.4 percent in the third quarter.
c. Inflation was 2.4 percent last year.
d. The price of gasoline rises due to rising oil prices.
Answer: d. The price of gasoline rises due to rising oil prices.
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Suppose that the demand for apples in Washington is elastic and the supply is inelastic. If the government of Washington passes a law prohibiting the use of synthetic pesticides that increases the marginal and average costs of producing apples, then:
a. the price of Washington State apples will decline. b. Washington will stop producing apples, and New York apple growers will benefit. c. apple growers will pass most of the increased costs on to consumers in the form of higher apple prices. d. apple growers will keep prices constant but reduce costs by advertising less. e. apple growers will bear most of the increased costs of regulation, and prices will increase only slightly.
Aggregate demand equals: a. C + G + I + EX
b. C + G + I + EX + IM. c. C + G + I – EX + IM. d. C + G + I + EX – IM.
An increase in the demand for union labor ________ , so there is no need to restrict labor supply or to ration jobs among union members
a. has no impact on wage and employment b. leads to higher employment and lower wage c. leads to higher wage and employment d. leads to lower wage and employment
Which of the following statements is false?
A) For purposes of computing GDP, the purchases of new residential housing are considered investment although it is undertaken by the household sector. B) Consumption includes spending on durable goods but not spending on services. C) Investment includes fixed investment but not inventory investment. D) b and c