Modern economists are increasingly using microeconomic analysis in macroeconomics because
A) microeconomic theory is more scientific.
B) aggregate outcomes stem from decisions made by individuals, business firms and government.
C) macroeconomic subjects such as inflation affect all individuals.
D) macroeconomics is older and more outdated.
Answer: B
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Refer to Figure 4-5. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor?
A) A + B B) B C) A D) B + C
Which of the following is not a drawback of utilitarianism?
a. There exists no valid way to make interpersonal utility comparisons. b. Is incompatible with the Pareto criteria. c. It is not directly compatible with economic efficiency. d. It implies social arrangements that most people would find objectionable.
One of the broad categories that could cause the aggregate demand curves to shift is changes to the _________ of consumers or firms.
a. health b. behavior c. savings d. employment
Which of the following would be most likely to cause a reduction in current aggregate demand in the United States?
a. Increased business optimism about the future. b. The economies of key trading partners fall into a recession. c. A sharp increase in the value of stocks owned by Americans. d. An increase in the expected rate of inflation.