Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?
a. the effect of taxes on the prices of airline tickets, and the profitability of automobile-manufacturing firms
b. the price of beef, and wage differences between genders
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 differences in average income from country to country
d
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Answer the following statements true (T) or false (F)
1) The amount of investment in an economy is ultimately limited by the amount of savings in that economy. 2) Increasing investment in the present means forgoing future consumption. 3) A nation that wants to invest in more newly created capital in the present must be willing to forgo present consumption. 4) Banks and other financial institutions provide the link between savers and economic investors in the macroeconomy.
Use the classical IS-LM model to show the effects of a temporary decrease in government purchases on the equilibrium levels of output, the real interest rate, employment, the real wage, and the price level.
What will be an ideal response?