The branch of economics which studies how households and firms make choices, interact in markets, and how government attempts to influence their choices is called
A) macroeconomics.
B) microeconomics.
C) positive economics.
D) normative economics.
Answer: B
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Refer to Labor Demand and Labor Supply. What does area B represent?
The following questions refer to the accompanying diagram, which shows an industry's labor demand and labor supply. Labor and capital are the only factors used by the industry. The industry hires L units of labor at a wage of PL.
a. The industry's total revenue.
b. The rent earned by the industry's laborers.
c. The total wages paid to the industry's laborers.
d. The rent earned by the industry's capital.
What are the factors that change investment demand and shift the demand for loanable funds curve?
What will be an ideal response?
Explain how "net capital flows" are related to "net foreign investment," "net foreign direct investment," and "net foreign portfolio investment."
What will be an ideal response?
According to the new classical view, if people appropriately realize that an increase in government debt implies higher future taxes, they will
a. save less since the substitution of debt for taxes makes them wealthier. b. increase their consumption since the substitution of debt for taxes makes them wealthier. c. save more now to meet the future tax liability implied by the increase in debt. d. alter neither their saving nor their consumption rate.