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) all aggregates are made up of individuals and firms.
D) the effects of macroeconomic subjects such as inflation and unemployment are independent of individual consumers and firms.
Answer: C
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In financial markets, when a firm issuing new securities has previously issued securities, these securities are called
A) seasoned issues. B) an initial public offering. C) secondary issues. D) investment-grade issues.
If the economy is growing 5% a year and GDP is $1000 billion, the additional revenues available to meet interest payments on the government deficit would be, ceteris paribus,
A) 50. B) 500. C) It depends upon the amount of new debt issued. D) There would be no additional revenues.
An externality is any activity for which an individual firm or consumer does not take into account all
A) of the ramifications of its actions on others. B) associated costs. C) associated benefits. D) associated costs and benefits.
A natural monopoly occurs when a single firm can produce the entire output of the market at a lower average cost than could many firms
a. True b. False Indicate whether the statement is true or false