An example of a microeconomic decision is a situation in which
A. a government contemplates buying foreign currencies in an effort to influence exchange rates and the country's demand for goods and services.
B. a firm evaluates how much to reduce the price of its product in an effort to influence sales and boost its profits.
C. a central bank considers how much to increase the money supply during the coming month in an effort to constrain the rate of inflation.
D. Congress and the president seek to reach a compromise on how much to increase government spending in an effort to influence national expenditures.
Answer: B
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Caroline Jahn has a professional degree and is 51 years old. Bob Rubate also has a professional degree and is 29 years old. On average, Caroline most likely earns
a. 75 percent less than Bob b. 7 percent less than Bob c. 75 percent more than Bob d. 7 percent more than Bob e. the same amount as Bob
A bank faces a required reserve ratio of 5 percent. If the bank has $200 million of checkable deposits and $15 million of total reserves, then how large are the bank's excess reserves?
A. $0 B. $5 million C. $10 million D. $15 million
With a quantity restriction, the total surplus of the market increases. On the contrary, with a licensing restriction, the total surplus decreases.
Answer the following statement true (T) or false (F)
Refer to the short-run production and cost data. In Figure A curve (1) is:
A. total product and curve (2) is average product.
B. total product and curve (2) is marginal product.
C. average product and curve (2) is marginal product.
D. marginal product and curve (2) is average product.