Macroeconomics is the study of
a. how the price of gasoline is determined
b. large objects
c. the economic behavior of individual decision makers
d. the behavior of the economy as a whole
e. the economic behavior of individual firms
D
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Millions of people from Mexico have migrated to the United States. This has reduced the supply of labor in Mexico and increased the supply of labor in the United States. Assume that the demand for labor in Mexico and the United States is unchanged
Then wages in the United States ________ and wages in Mexico ________. A) fall; rise B) rise; do not change C) rise; rise D) do not change; fall E) fall; fall
For computers and other business equipment, small changes in business earnings tend to generate relatively large short-run changes in the demand for this equipment, and the long-run income response tends to be smaller
Industries that face demand behavior of this type are known as: A) natural monopolies. B) cartels. C) cyclical industries. D) constant-cost industries.
There was an extensive black market (illegal market) for many consumer products in the United States during World War II. A likely explanation of the black market is that:
a. the prices of goods were artificially held down by price controls. b. black markets were legal during the war. c. goods were not subject to price controls. d. gasoline rationing greatly restricted civilians from driving to stores.
As inflation drives up prices, people attempt to find substitutes and adjust what they buy. The resulting substitution bias problem causes the CPI to:
a. overstate the impact of higher prices on consumers. b. consistently underestimate the true inflation rate. c. omit the benefits of product quality improvements. d. have larger fluctuations than other price indexes.