Macroeconomics often relies on microeconomic analysis because
A. microeconomics is older than macroeconomics.
B. microeconomic theory can be tested and macroeconomic theory cannot be tested.
C. the effects of macroeconomic subjects such as inflation and unemployment are independent of individual consumers and firms.
D. all aggregates are made up of individuals and firms.
Answer: D
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The classical model uses the assumption that
A) all wages and prices are flexible. B) interest rates are not flexible. C) monopoly is widespread in the economy. D) economic markets are fragile and have no tendency to move towards an equilibrium.
According to your textbook, a scientist of any kind
A) works with some assumptions and biases. B) never confront tradeoffs. C) offer only the best evidence to support his or her theory. D) be the best candidate for the Nobel Prize in Economics.
When nations attempt to move quickly from central planning to a market system, they face the obstacle of high transaction costs in large part because
A) market systems are unnatural and require careful design. B) people who have lived under socialism lack the basic skills a market system requires. C) people who have long lived under socialism are not sufficiently individualistic. D) the experience of socialism makes people distrustful of one another. E) they lack many of the institutions that develop over time in a market system.
The main policy-making body of the Federal Reserve System is the Federal Open Market committee
Indicate whether the statement is true or false