Microeconomics is _____ while macroeconomics is _____.
a. always positive in nature; always normative in nature
b. the area of economics which studies how individuals make decisions; the area of economics which studies the big picture
c. the study of the economy as a whole; the study of the behavior of individual decision makers
d. why economists agree; why economists disagree
Ans: b. the area of economics which studies how individuals make decisions; the area of economics which studies the big picture
You might also like to view...
What are the assumptions of the model of perfect competition? Explain why each is important for short-run and long-run equilibrium
The optimal number of workers to be hired by a firm operating in a competitive labor market is where:
a. P = MRP. b. MRP = w. c. P = w. d. MP = MRP.
One way that insurance companies can reduce the moral hazard problem is to:
A. make insurance customers pay a deductible before the company pays on a claim. B. engage in genetic testing to determine who is more likely to be high risk. C. eliminate copayments on insurance claims. D. insure only customers with good morals.
Active changes in tax and spending by government intended to smooth out the business cycle are called ______, and changes in taxes and spending that occur passively over the business cycle are called ______.
a. automatic stabilizers; discretionary fiscal policy b. fiscal policy; automatic stabilizers c. automatic stabilizers; monetary policy d. fiscal policy; conscious fiscal policy