The basic difference between macroeconomics and microeconomics is that
a. macroeconomics is concerned with the forest (aggregate markets), while microeconomics is concerned with the individual trees (subcomponents).
b. macroeconomics is concerned with policy decisions, while microeconomics applies only to theory.
c. microeconomics is concerned with the forest (aggregate markets), while macroeconomics is concerned with the trees (subcomponents).
d. opportunity cost is applicable to macroeconomics, and the fallacy of composition relates to microeconomics.
A
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Money serves as a medium of exchange means that
A) it benefits both buyers and sellers. B) it eliminates the need for barter. C) it reduces transaction costs. D) All of the above are correct.
The expected rate of change in the nominal dollar/euro exchange rate is best described as
A) the expected rate of change in the real dollar/euro exchange rate minus the U.S.-Europe expected inflation difference. B) the expected rate of change in the real dollar/euro exchange rate plus the U.S.-Europe real interest rate difference. C) the expected rate of change in the real dollar/euro exchange rate plus the U.S.-Europe expected inflation difference. D) the expected rate of change in the real dollar/euro exchange rate minus the U.S.-Europe real interest rate difference. E) the expected rate of change in the real dollar/euro exchange rate plus the European expected inflation.
A nation running a persistent balance of payments deficit while part of a fixed exchange rate system would have to __________ international reserves in an effort to prevent its currency from __________
A) amass; appreciating B) amass; depreciating C) pay out; appreciating D) pay out; depreciating
When consumption and saving are graphed relative to real GDP, an increase in personal taxes will shift:
A. both the consumption and saving schedules downward. B. both the consumption and saving schedules upward. C. the consumption schedule upward and the saving schedule downward. D. the consumption schedule downward and the saving schedule upward.