Define microeconomics
What will be an ideal response?
Microeconomics is the study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
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Which of the following is a TRUE statement concerning bank holding companies?
A) Bank holding companies own few large banks. B) Bank holding companies have experienced dramatic growth in the past three decades. C) The McFadden Act has prevented bank holding companies from establishing branch banks. D) Bank holding companies can own only banks.
Rational expectations imply
a. markets always clear. b. that prices are "sticky" c. policy that is unpredictable is irrelevant to economic outcomes. d. both a and c. e. None of the above.
Mark spends his weekly income on gin and cocktail olives. The price of gin has risen from $7 to $9 per bottle, the price of cocktail olives has fallen from $6 to $5 per jar, and Mark's income has stayed fixed at $46 per week. If you measure gin on the vertical axis and cocktail olives on the horizontal axis, then the budget constraint
a. is steeper after the price changes. b. is flatter after the price changes. c. is the same after the price changes. d. shifts in a parallel fashion to the old budget constraint after the price changes.
A rise in the government budget deficit
a. increases the interest rate so in the market for foreign-currency exchange, supply shifts right. b. increases the interest rate so in the market for foreign-currency exchange,supply shifts left. c. decreases the interest rate so in the market for foreign-currency exchange, supply shifts left. d. decreases the interest rate so in the market for foreign-currency exchange supply shifts right.