A microeconomist would most likely study the effect of a reduction in income tax rates on:
a. total output in the economy
b. the output of the steel industry.
c. inflation.
d. unemployment.
b
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Which conditions must be present for "perfect competition" to occur?
A) A large number of buyers and sellers, and all of them enjoy full and complete information. B) Sellers produce identical products. C) There is a costless mobility of resources. D) Everybody behaves as a price taker. E) All of the above.
A profit maximizing monopoly's price is
A) not consistently related to price that would prevail if the market was perfectly competitive. B) greater than the price that would prevail if the industry was perfectly competitive. C) less than the price that would prevail if the industry was perfectly competitive. D) the same as the price that would prevail if the industry was perfectly competitive.
A hard peg may be achieved by all of the following except
A) following the rules of the Bretton Woods Agreement. B) dollarization. C) establishing a currency board. D) mutual agreements establishing a common currency.
The result of a binding price floor is:
a. quantity demanded at the price floor exceeds the amount at the equilibrium price, and quantity supplied is less than the amount at the equilibrium price. b. quantity supplied at the price floor exceeds the amount at the equilibrium price, and quantity demanded is less than the amount at the equilibrium price. c. quantity demanded and quantity supplied at the price floor are equal at the equilibrium price. d. quantity demanded at the price floor is less than the amount at the equilibrium price, and quantity supplied is also less than the amount at the equilibrium price.