Is inflation a macroeconomic or a microeconomic question? Why?
What will be an ideal response?
Inflation is a macroeconomic question because it deals with an economy-wide phenomenon. The price increase of a specific product, such as gasoline, would be a microeconomic matter. Since inflation deals with prices in the economy as a whole, it is a macroeconomic concern.
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Average variable cost (AVC)
A) is the variable cost divided by the average sales price of the final good. B) is the variable cost divided by the quantity of output produced. C) is equal to average fixed cost (AFC) when no output is produced. D) is always less than average fixed cost (AFC).
Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Jennifer should invest in college when the net present value of that investment is ______ and the internal rate of return is ______ the current interest rate.
A. positive; greater than B. negative; greater than C. positive; less than D. negative; less than