Macroeconomics is best defined by which of the following statements?
A. Macroeconomics is the study of how the prices of individual goods are determined.
B. Macroeconomics is the study of the behavior of the economy as a whole.
C. Macroeconomics is the study of individual households.
D. Macroeconomics is the study of how firms attempt to maximize profits.
Answer: B
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Describe the major features of the business cycle. Be sure to discuss what variables are affected by the cycle, a description of the key features that are apparent in the data, how variables are related to one another, how regular the cycle is, and
how predictable the cycle is.
In the short run, a firm should shut down if its economic loss from operating exceeds its total fixed cost
a. True b. False Indicate whether the statement is true or false
When the Fed decreases the required reserve ratio, then the:
a. ability of banks to make loans is restricted. b. ability of banks to make loans is enhanced. c. ability of banks to make loans is unaffected. d. interest rate that banks pay to the Fed to borrow money is reduced. e. interest rate that banks pay other banks to borrow money is decreased.
It's not likely that a country will specialize completely in one good even if it has a lower opportunity cost because
A. The country would end up inside its production possibilities curve. B. Comparative advantage is not a workable concept in the world economy. C. Opportunity costs increase as more of a good is produced. D. The country would want to save some of the good for its own citizens.