Which of the following topics are more likely to be studied by a macroeconomist
ID: 1231936 • Letter: W
Question
Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?
a. The effects of taxes on the prices of airline tickets, the profitability of automobile manufacturing firms, and employment trends in the food-service industry
b. The price of beef, wage differences between genders, and antitrust laws
c. How consumers maximize utility, and how prices are established in markets for agricultural products
d. The percentage of the labor force that is out of work and the difference in average income from country to country
Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift
a. aggregate supply to the right
b. aggregate supply to the left
c. aggregate demand to the right
d. aggregate demand to the left
Which of the following would cause stagflation?
a. Aggregate demand shifts right.
b. Aggregate demand shifts left.
c. Aggregate supply shifts right.
d. Aggregate supply shifts left.
Closely watched indicators such as the inflation rate and unemployment are released each month by the
a. Bureau of the Budget
b. Bureau of Labor Statistics
c. Department of the Treasury
d. President's Council of Economic Advisors
One determinant of the long-run average unemployment rate is the
a. market power of unions, while the inflation rate depends primarily upon government spending
b. minimum wage, while the inflation rate depends primarily upon the money supply growth rate
c. rate of growth of the money supply, while the inflation rate depends primarily upon the market power of unions
d. existence of efficiency wages, while the inflation rate depends primarily upon the extent to which firms are competitive
In the long run, the inflation rate depends primarily on
a. the ability of unions to raise wages
b. government spending
c. the money supply growth rate
d. the monopoly power of firms
Explanation / Answer
1)
a, c are more likely to be studied by a macro economist
Pricing etc, individuals' decisions are studied by micro where as the aggregates are studied by macroeconomists
2)
answer: a
In an economic contraction, the government sets fiscal/monetary policies to increase the spending in the economy, by boosting money supply (through increasing government spending and reducing interest rates etc). This will increase the aggregate demand. Shifting the demand curve to the right.
3)
answer: d
In stagflation, supply is reduced drastically due to increased cost of production and inflation of prices. This slows down the economy at the same time increases prices.
Supply reduces means supply shifts left
4)
answer: b
bureau of labor statistics does that.
5)
answer: b
inflation rate primarily depends on money supply growth rate.
employment in the long run depends on minimum wage levels.
6)
answer: c
inflation rate primarily depends on money supply growth rate.
employment in the long run depends on minimum wage levels.
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