Microeconomics deals with which of the following?
a. the total output of an economy
b. the measurement of a nation's inflation rate
c. how producers and consumers interact in individual markets
d. how tax policies influence economic growth
e. whether wage growth will outpace inflation in the coming year
C
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If the Fed wants to depreciate the U.S. dollar against the British pound, it will ________
A) sell foreign exchange B) decrease the money supply C) sell British pounds D) sell U.S. dollars
The interest rate effect states that an increase in the price level will cause:
a. a decline in the interest rate. b. a decrease in investment and aggregate expenditures. c. an increase in the equilibrium level of income. d. a decrease in the supply of financial assets. e. an increase in real wealth.
In contrast to American firms, Japanese firms frequently make lifetime employment commitments to their workers and agree not to lay them off when product demand is weak. Other things being equal, we would expect Japanese firms to:
A. face more elastic product demand curves than American firms. B. have relatively greater variable costs than American firms. C. discontinue production at higher product prices than would American firms. D. continue to produce in the short run at lower prices than would American firms.
Which of the following activities is one of the responsibilities of the Federal Reserve?
A. loaning money to other countries that are friendly to the United States B. issuing new bonds to finance the federal budget deficit C. auditing the various agencies and departments of the federal government D. assisting banks that are in a difficult financial position