An example of a microeconomic decision is a situation in which
A) the Federal Reserve considers how much to increase the money supply during the coming month in an effort to constrain the rate of inflation.
B) Congress and the president seek to reach a compromise on how much to increase government spending in an effort to influence national expenditures.
C) a firm evaluates how much to reduce the price of its product in an effort to influence sales and boost its profits.
D) the U.S. Treasury contemplates buying foreign currencies in an effort to influence exchange rates with an aim to boosting demand for U.S. goods and services.
Answer: C
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The key defining feature of oligopoly, in addition to firms' market power, is
a. collusion. b. free entry and exit. c. firms take rivals' actions into account. d. the Prisoner's Dilemma.
Explain why "good news for the economy is bad news for bond prices."
What will be an ideal response?
Why do trade-offs occur? How are budget constraints related to trade-offs?
What will be an ideal response?
In the national income accounts, government expenditure on goods and services exclude
A) transfer payments. B) state and local government purchases. C) local government purchases but include state government purchases. D) spending on national defense.